11:07 AM ET

Dividends Help Make L Brands Stylish

By Johanna Bennett

Costco Wholesale (COST ) isn’t the only retailer to recently offer shareholders something special.

On the heels of unveiling strong January same-store sales growth and raising its fourth-quarter financial forecasts. L Brands (LB ), the owner of the Victoria Secret and Bath & Body Works, raised its annual dividend by 47% to $2 a share, and announced a special dividend of $2 a share. The company also authorized the repurchase of $250 million of its shares

The dividend and share-repurchase actions announced today reflect confidence in our growth opportunities and commitment to delivering shareholder value. Chairman and CEO Leslie H. Wexner said Thursday.

Whats So Special About Costco?

By Johanna Bennett

Costco Wholesale (COST ) is looking pretty stylish today. The shares climbed more than 2% in recent trading after the warehouse retailer, which sells groceries, fuel and other items in bulk, announced a special one-time dividend of $5 a share.

Costco already pays shareholders a quarterly payout of 36 cents a share. The added dividend will cost the company $2.2 billion, and will be founded through existing cash $7.7 billion on the balance sheet vs roughly $5 billion in debt and additional borrowings.

This is not the first special dividend paid to Costco shareholders. In November 2012, investors received a one-time payment of $7 a share, or $3 billion.

And according to Cowen &Co. analyst Oliver Chen and his team, Costco still has “plenty of ammunition for more.”  Chen and friends write:

We believe the companys clean balance sheet (we estimate >$5.5bn post special dividend) and stable FCF profile (

3.2% FCF yield) allow COST the ability to grow the business globally as well as return cash to shareholders in the form of share repurchases and ongoing dividends.

Last month, Costco reported a 17% increase in profit on a 7% increase in same-store sales, excluding negative impacts from gasoline price deflation and foreign exchange.

Jan 30, 2015

11:09 AM ET

A.M. Roundup: Moodys Cuts Petrobras; Costcos Special; Dividend Freeze at Royal Dutch

By Johanna Bennett

The Dow is falling again, dropping more than 90 points as soft GDP number stoke fears of slowing economic growth. U.S. Treasuries are climbing again, with the yield on the 10-year note falling below 1.7%. And there is some crazy news out of Russia about interest rates.

As for other headlines, here’s a smattering of fixed income headlines

Costco Wholesale (COST ) is paying a $5 special dividend – WSJ

Moody’s has downgraded all ratings Petróleo Brasileiro (PBR ), the third downgrade of Brazil’s state-run oil company in four months and another significant setback for a company in the midst of a widespread corruption scandal. WSJ

St. Louis Fed President James Bullard. speaking on Bloomberg TV and radio, said the Fed should not delay an interest rate rise too long because it risks getting behind the curve and having to aggressively tighten policy later Reuters

Royal Dutch Shell (RDS.A ) is cutting spending amid lower oil prices. That includes freezing dividends. WSJ

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