Costco Wholesale Corp. share price up, to distribute a special dividend of $2.2 billion

The biggest warehouse-club chain in the US – Costco Wholesale Corp. – announced its intentions of returning a total $2.2 billion to its shareholders as a one-time dividend.

The retailer, which sells a great variety of products in bulk, has drawn benefits from lower gasoline prices, membership fees and strong store sales.

“Todays announcement of a $5.00 special dividend is our latest step in returning capital to our shareholders while maintaining our conservative capital structure,” said Mr. Richard Galanti, Costcos Executive Vice President and Chief Financial Officer. “Our strong balance sheet and favorable access to the credit markets allow us to provide shareholders with this dividend, while also preserving financial and operational flexibility to grow our business globally.”

According to the US-based retailers statement, the special dividend plan includes distribution of $5 per share, which will be funded through existing cash and additional borrowings.

The payment is planned to be paid on February 27th to shareholders of record on February 9th. It will be added to the regular quarterly dividend of 36 cents per share, which was announced by the retailer on January 29th.

This is not the first time the company hands such a large additional dividend. In December 2012 Costco distributed $3 billion, or $7 a share, as a one-time dividend as the bulk retailer took advantage of favorable lending conditions and carried out the payment with borrowed funds.

Costco Wholesale Corp. rose by 1.67% on Friday on the NASDAQ to close at $142.99 per share, marking a one-year change of +26.84%. The company is valued at $61.95 billion. According to CNN Money, the 23 analysts offering 12-month price forecasts for Costco have a median target of $147.00, with a high estimate of $160.00 and a low estimate of $131.00. The median estimate represents a +2.80% increase from the last price of $142.99.