Shares of Costco Wholesale (NASDAQ: COST) were moving up the charts today after the membership-based warehouse retailer topped estimates in its first-quarter earnings report and announced a $15/share special dividend. As a result, the stock was up 4% as of 10:37 a.m. ET.

Costco answers the call

For several quarters now, Costco management has been asked about paying another special dividend as the company has a history of doing so every few years. Unsurprisingly, investors were delighted to hear the news of the $15/share special dividend, which is its biggest one yet. Costco’s last special dividend was $10/share in 2020. The dividend will be paid out on Jan. 12 to shareholders of record at the close as of Dec. 28. Costco will spend $6.7 billion on the payout.

That dividend implies a yield of close to 2.3% based on the stock’s current price. However, it could be significantly higher for longtime shareholders based on what they paid for the stock.

Additionally, Costco reported solid earnings results. Comparable sales, excluding the impact of gas prices and currency exchange, were up 3.9%. Revenue rose 6.2% to $57.8 billion, slightly higher than the analyst consensus of $57.72 billion. Margins improved as well, and earnings per share rose from $3.07 to $3.58, ahead of estimates at $3.42.

Can Costco keep climbing?

Costco can do little wrong these days, it seems. The stock is up an impressive 43% year to date, and this company has delivered solid results. However, legitimate questions surround valuations as the company’s earnings growth hasn’t kept up with the stock price, which has surged in the recent market rally as expectations have built for lower interest rates.

The retailer still looks like a great stock to own for the long term, but investors may want to temper their expectations with the price-to-earnings ratio now at 44.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.