5 Best Dividend Stocks According To Jim Cramer

3. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 67

Last month Jim Cramer talked about how Costco Wholesale Corporation (NASDAQ:COST) was falling even after receiving several price target boosts. Cramer said Costco Wholesale Corporation (NASDAQ:COST) fell because the company did not offer any special dividend and did not announce price hikes for members. Earlier this year Cramer disclosed that Costco Wholesale Corporation (NASDAQ:COST) was part of his charitable trust’s portfolio. He said at the time that Costco Wholesale Corporation (NASDAQ:COST)’s problems would be resolved in a couple of months.

Earlier this month Costco Wholesale Corporation (NASDAQ:COST) said its net sales in October jumped 4.5% year over year to $18.53 billion from $17.73 billion reported last year.

Cooper Investors made the following comment about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2023 investor letter:

“With the market rally in the first half of 2023 driving double digit returns we took the opportunity early in the quarter to reassess Value Latency embedded in the portfolio. The spotlight was on more highly valued stocks that represent some of our longest held positions and among the better performers over the years. The outcome is that we have exited several long-term positions at what we consider attractive prices, where the balance of Risk Adjusted Value Latency was no longer in our favour.

We remain admirers of these businesses and they remain on our watchlist, but the reality is their appeal is widely recognised today. Management have executed well on earnings growth, but returns have also come from substantial multiple re-ratings that we see as unlikely to reoccur from today’s higher base.

Costco Wholesale Corporation (NASDAQ:COST) was acquired in March 2015 at ~$150 and has more than tripled over its holding period to ~$550 today, delivering a total return with dividends reinvested of ~330% in USD or IRR of 20%. Over the journey the multiple re-rated from 25 times to ~35 times.”