Costco Dividend Plan Praised By Analysts

Discussion
Apr 29, 2004
George Anderson

By George Anderson


A report in the Seattle Times suggests Costco has bowed to pressure from Wall Street to be more “shareholder-friendly” by announcing it would pay a quarterly dividend of 10 cents a share beginning next month.


Deutsche Bank analyst Bill Dreher told the paper he believes Costco will attract new investors to the company.


Jim Sinegal, president and chief executive officer of Costco, said in a released statement, “This dividend demonstrates our confidence in the company’s long-term growth potential and financial strength. We are pleased to be able to return capital to our shareholders and to do so while we continue aggressively to pursue the opening of new locations.”


Moderator’s Comment: What are your thoughts on Costco’s announcement that it will begin paying a dividend to shareholders
beginning next month?


The RetailWire Raspberry Award for the silliest comment of the week made by someone who should know better goes to J.P. Morgan retail analyst Shari Eberts
who wrote in a research note, “We think the initiation of a dividend is a clear positive and the company’s first shareholder-friendly move in some time.”


Okay, we don’t actually have a RetailWire Raspberry Award for the silliest comment of the week made by someone who should know better. If we did, however,
Ms. Eberts would definitely be this week’s winner. Since when does being competitively superior not count as being shareholder-friendly?

George Anderson – Moderator

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