Costco (NASDAQ: COST) is an unusually successful retailing business. The warehouse giant has been winning market share for decades thanks to its no-frills, membership-based selling approach that allows it to offer products at rock-bottom prices. Costco routinely beats rivals such as Walmart (NYSE: WMT) in key growth and customer traffic metrics. Its earnings are among the most stable in the industry, too.

Yet Costco isn't an ideal dividend stock for several reasons, including the fact that management prefers to pay dividends in sporadic lump-sum payments rather than through predictably rising annual ones. There's a better dividend option available for fans of passive income, and it's sitting right in Costco's industry.

(NYSE: TGT) stock looks attractive after being left out of the recent market rally. Shares declined 15% in the past full year compared to Costco's 45% surge and the 22% increase in the S 500. That's because the chain has been posting weak growth trends, with comparable-store sales falling 5% in the most recent quarter. Management is predicting that sales will fall at about the same rate for the full 2023 fiscal year. Costco, in contrast, just reported accelerating comps gains for the month of December at 9 %.

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Source Fool.com