Costco Wholesale Corporation COST recently declared a 12.5% hike in its quarterly dividend. This Issaquah, WA-based company raised its quarterly dividend to 45 cents a share (or $1.80 annually) from the prior payout of 40 cents (or $1.60 annually). The increased dividend will be paid on May 13 to stockholders on record as of Apr 29, 2016. Following, the dividend hike shares of the company gained 1.2% on Friday.The dividend yield, based on the new payout and the last closing market price, is approximately 1.18%. In Apr 2015, Costco raised its quarterly dividend by 12.7% to 40 cents (or $1.60 annually) from 35.5 cents a share (or $1.42 annually).Costco is an attractive option for both growth and income seeking investors. An income generating and dividend paying stock is always a preferred investment option. People looking for regular income from stocks are most likely to be inclined toward companies that have a track record of consistent and incremental dividend payments.Dividend hikes not only enhance shareholder returns, but also raise the market value of the stock. Through this strategy, companies try to win investors, thereby persuading them to either buy or hold the scrip instead of selling it.Costco continues to make prudent use of its cash flow through share repurchases and dividend payments. This underlines its efforts to maximize shareholders’ return under trying economic conditions. During the second quarter of fiscal 2016, the company bought back a total of 531,000 shares for $80 million. Moreover, the company’s current resources are reasonably adequate to support expenditures associated with its ongoing expansion initiatives.Costco currently has a Zacks Rank #3 (Hold).Stocks to ConsiderSome better-ranked stocks in the retail sector include Burlington Stores, Inc. BURL, Dollar General Corporation DG and Urban Outfitters Inc. URBN. Burlington Stores sports a Zacks Rank #1 (Strong Buy), whereas both Dollar General and Urban Outfitters hold a Zacks Rank #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report URBAN OUTFITTER (URBN): Free Stock Analysis Report DOLLAR GENERAL (DG): Free Stock Analysis Report COSTCO WHOLE CP (COST): Free Stock Analysis Report BURLINGTON STRS (BURL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research