Costco (COST) Stock Rises Today After Upping Dividend, Reauthorizing $4 Billion Buyback Program

NEW YORK (TheStreet) -- Costco shares are climbing 1.74% to $147.08 in early market trading on Monday after the big box retailer announced that it was raising its quarterly dividend while also reauthorizing its share buyback program.The Issaquah, WA-based retailer announced that it was raising its quarterly dividend payout to 40 cents per share from 35.5 cents per share payable May 15 to shareholders of record on May 1.Additionally, the company said that its board had reauthorized a $4 billion stock buyback program that expires four years from now, to replace the current buyback program that is scheduled to expire at the end of this month.Costco shares have done well this year with the stock closing Friday up 27% since the start of the year. TheStreet Ratings team rates COSTCO WHOLESALE CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation: "We rate COSTCO WHOLESALE CORP (COST) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: COST's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share. COSTCO WHOLESALE CORP has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COSTCO WHOLESALE CORP increased its bottom line by earning $4.66 versus $4.63 in the prior year. This year, the market expects an improvement in earnings ($5.24 versus $4.66). The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Food & Staples Retailing industry average. The net income increased by 29.1% when compared to the same quarter one year prior, rising from $463.00 million to $598.00 million. Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, COSTCO WHOLESALE CORP's return on equity exceeds that of both the industry average and the S&P 500. Powered by its strong earnings growth of 28.57% and other important driving factors, this stock has surged by 29.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels. You can view the full analysis from the report here: COST Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015

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