Walmart or Costco: Which Dividend Stock Pays You Better?

Walmart is a Dividend King with 52 straight years of raises, while Costco pays a modest ordinary dividend plus rare, large special dividends that can dwarf a year of regular payouts. This guide compares WMT and COST on yield, reliability, and total income, then shows you how to track ordinary versus special dividends and forecast annual income inside PortfolioTrackr.

Walmart or Costco: which dividend stock pays you more?

Walmart (WMT) pays you more reliable, predictable income, while Costco (COST) pays you more total cash in the years it declares a special dividend. Walmart's forward yield sits near 0.9% after decades of increases, while Costco's ordinary yield is roughly 0.5%, topped up occasionally by specials of $10 to $15 per share.

The right pick depends on whether you value steady, forecastable income or are willing to hold for lumpy, larger payouts. Both are low-yield names, so neither is a pure income play the way a bank stock or REIT would be.

What is a Dividend King, and why does Walmart qualify?

A Dividend King is a company that has raised its dividend for at least 50 consecutive years. Walmart qualifies with over 52 years of uninterrupted annual increases, placing it in an elite group of fewer than 55 US companies.

This status matters because it signals durable cash flow and management discipline across recessions, inflation spikes, and retail disruption. For income investors, a Dividend King offers a high probability that your payout grows every year, which compounds over decades.

• Consistency: Walmart has never cut or frozen its dividend in 5 decades.
• Growth rate: Recent hikes have run around 9% to 13% annually.
• Payout ratio: Well under 40%, leaving room for future raises.

How does Costco's special dividend actually work?

Costco's special dividend is a one-time, discretionary cash payout declared on top of its regular quarterly dividend, funded by excess cash on the balance sheet. Costco has issued five specials since 2012, ranging from $7 to $15 per share, with the most recent $15 special paid in January 2024.

Ordinary vs special dividends: the key difference

An ordinary dividend is a recurring, scheduled payment you can forecast, while a special dividend is irregular and cannot be relied on for planning. Costco's ordinary quarterly dividend is around $1.16 per share, but a single special can equal three years or more of that ordinary stream.

• Ordinary dividend: Predictable, used to forecast annual income.
• Special dividend: Lumpy, one-off, excluded from reliable income forecasts.
• Tax treatment: Both are typically taxed as dividend income, but timing differs and can complicate your year-end reporting.

If you're building an income plan, tracking these separately is essential. Our guide on how much dividend income your portfolio will pay this year walks through why special payouts should never be baked into your baseline forecast.

WMT vs COST: a side-by-side dividend comparison

Walmart wins on yield and reliability, while Costco wins on capital appreciation and occasional windfall cash. Here is how the two names stack up for an income-focused investor.

Neither stock is a high-yield play. If income is your primary goal, compare both against alternatives like the ones in our CDs versus dividend stocks after-tax yield breakdown, where a 4.35% CD often out-earns a 0.9% dividend stock on pure cash flow.

How do you track ordinary vs special dividends in PortfolioTrackr?

In PortfolioTrackr, the projected annual income comes from each holding's regular dividend rate, not from the payments you log, so logging a special does not change your forecast. When Costco declares a special, you log the payment and can add a note marking it as a one-off; it still counts in your income received.

Setting it up

• Log WMT and COST holdings with share count and cost basis.
• Log each dividend payment, and add a note such as special to any one-off.
• PortfolioTrackr pulls upcoming ex-dates and payment dates automatically on every plan, whether or not a broker is connected.

If you hold across multiple brokers, say Interactive Brokers for US stocks and Charles Schwab for a separate account, you can connect both and see their holdings in one place: Interactive Brokers directly on every plan, Schwab through the SnapTrade bridge on Pro and Lifetime. See our walkthrough on connecting your brokerage account to a portfolio tracker to consolidate everything.

How do you forecast annual dividend income from WMT and COST?

Forecast your annual income by multiplying each holding's share count by the forward ordinary dividend rate, then excluding specials entirely from the baseline. For Walmart, that is roughly shares x $0.83 per year, and for Costco, roughly shares x $4.64 per year on the ordinary quarterly rate.

Here is a worked example for a $20,000 split evenly between the two:

1. WMT: $10,000 buys about 100 shares, yielding roughly $83 per year.
2. COST: $10,000 buys about 10 shares, yielding roughly $46 per year ordinary.
3. Combined baseline: around $129 per year, before any Costco special.

A single Costco special of $15 per share on 10 shares adds $150 in one shot, more than your entire ordinary income for the year. That is the lumpiness you plan around, not with. Tracking ex-dates is critical here, and our guide on tracking yields and ex-dates shows how to avoid missing a payout by buying too late.

Which stock fits your income allocation better?

Investors who want predictable, growing income they can budget around often lean to Walmart, while those who put share price growth first, with occasional cash windfalls, often lean to Costco. Most income investors treat both as growth-with-a-dividend rather than yield engines.

• Retiree drawing income: WMT's reliability suits a spending plan better.
• Long-horizon compounder: COST's price appreciation has historically outpaced WMT.
• Diversified income sleeve: Either one usually sits next to higher-yield names in a blended income mix.

Because both yields are low, many investors anchor their income sleeve with dividend ETFs instead. Our comparison of VIG versus VYM dividend ETFs covers growth-focused versus high-yield fund choices that pair well with single names like WMT.

The bottom line

Walmart is the better pure dividend stock thanks to its Dividend King status, 52 years of raises, and a higher, more forecastable 0.9% yield. Costco delivers more total cash in special-dividend years but its 0.5% ordinary yield makes it a growth stock that happens to pay dividends.

Whichever you own, the discipline that matters most is separating reliable ordinary income from unpredictable specials in your forecast. PortfolioTrackr projects annual income from the regular dividend rate, so a special does not inflate your forecast, and the payments you log, specials included, count in your income received.

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