COSTCO DD You don’t want to miss out
COST pays crap dividends but every 3 years, it's paid special dividend of whopping $5 or $7. It's about time for one as it's been 3 full years since it paid a special dividend.
There's an article on this but that's crap DD. You can't just look at patterns and predict the future. You have to analyze and use your brain. I looked into the 10-K and did actual DD myself.
Costco's cash and cash equivalent has been piling up 2-3 billion every quarter. Now it's sitting at $13 or $14 billion. It's debt is maybe $7-8 billion and they're dirt cheap.
Costco benefited from covid and rising cases could result in lockdown which is favorable for Costco.
I don't agree that Costco loses out due to a effective vaccine. I don't think it's impacted materially due to these factors.
So given these favorable conditions, Costco will either invest heavily in e-commerce, massive expansion in Asia, or pay a fat dividend like $15 per share. 400 million shares so that's about $6 billion.
Any of these will be very good. Interest rates are so low it's almost daylight robbery to keep that much cash for a retailer like COSTCO earning maybe 1-2% on CDs or short terms. Investors are already getting impatient at the growing cash pile and are wondering what Costco will do.
Submitted November 11, 2020 at 12:33AM by Poland_Spring10
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