Is Costco a Perfect Dividend Stock?

Costco (NASDAQ: COST) has shown that its business model won't be upended by the ongoing digital revolution. The warehouse club has steadily grown its membership while maintaining roughly 90% renewal rates.

Those are tremendous signs for a company that makes most of its money from memberships. Costco has been a consistent performer, with $3.66 billion ($8.26 per diluted share) in income for fiscal 2019, with companywide same-store sales growing by 6.1% for the year.

Because of its membership-based model, the company has predictable quarterly revenue. If the chain sees new memberships fall or renewal rates drop, it knows it needs to tweak its business model to protect its long-term success. That's an advantage over its retail rivals and a comfort for investors.

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Source Fool.com