12 Best Dividend Stocks For Steady Growth

3. Costco Wholesale Corporation (NASDAQ:COST)

5-Year Average Dividend Growth: 17.92%

Consecutive Years of Dividend Growth: 20

Costco Wholesale Corporation (NASDAQ:COST) is a Washington-based retail company that deals in a wide range of products for its consumers. The company currently operates 878 warehouses in different locations. The company’s business has remained consistent, as the stock returned more than 220% in the past five years. One of the main reasons for this growth is that the company operates within a sector that typically weathers economic downturns well, and its expansion is still ongoing. In 2024, the company plans to open 28 new stores worldwide, with most of them in the US. As it increases its number of locations, it’s likely to see a rise in memberships and revenue, which should support long-term growth in sales and earnings.

Additionally, Costco Wholesale Corporation (NASDAQ:COST) is well-positioned to capitalize on the ongoing shift toward online shopping. The retailer anticipates that its extensive range of competitively priced products will continue to draw customers both online and in physical stores. ClearBridge Investments highlighted consumer sentiment in its Q2 2024 investor letter. Here is what the firm said about COST:

“Consumer staples holdings were also standouts in the quarter, such as Costco Wholesale Corporation (NASDAQ:COST), which continues to execute well and delivered better than expected earnings, helped by strong traffic driving better expense leverage. Customers also looked to be shifting toward more discretionary purchases.”

Costco Wholesale Corporation (NASDAQ:COST) demonstrates its robust business fundamentals through its solid track record of dividend payments. The company offers a quarterly dividend of $1.16 per share, growing it by 13.7% in April this year. This marked the company’s 20th consecutive year of dividend growth. Over the past five years, its annual average dividend growth rate was roughly 18%. The company also paid a special dividend of $15 per share at the end of 2023. As of August 23, the stock has a dividend yield of 0.53%.

Costco Wholesale Corporation (NASDAQ:COST) was included in 71 hedge fund portfolios at the end of Q2 2024, up from 65 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of roughly $6 billion.