1-Star Price
INVESTOR
5-Star Price
INVESTOR
Economic Moat
INVESTOR
Capital Allocation
INVESTOR
We modestly lower our fair value estimate on wide-moat Costco to $450 per share, from $490 previously, due to a slight pullback in our midcycle operating margin forecast to 4.0% (from 4.2%). While we expect the retailer to further leverage its fixed costs over a robust sales base in coming years, we anticipate Costco will follow its historical precedent of reinvesting some profits into lower unit selling prices to drive volume growth, keeping gross margins anchored.
Costco operates a membership-based, no-frills retail model, predicated on offering a select product assortment in bulk quantities at bargain prices. The firm avoids maintaining costly product displays by keeping inventory on pallets and limits distribution expenses by storing its inventory at point of sale in the warehouse. Given Costco’s frugal cost structure, the firm is able to price its merchandise below competing retailers, driving high sales volume per warehouse and allowing the retailer to generate strong profits on thin margins. Costco operates 591 warehouses in the United States and boasts over 60% market share in the domestic warehouse club industry. Internationally, Costco operates another 270 warehouses, primarily in markets such as Canada, Mexico, Japan, and the U.K.
Morningstar analysts hand-select direct competitors or comparable companies to provide context on the strength and durability of COST’s competitive advantage.
Costco Wholesale Corp
XNAS: COST
| The Kroger Co
XNYS: KR
| Target Corp
XNYS: TGT
| Walmart Inc
XNYS: WMT
| |
Price
| 556.03 | 45.28 | 110.74 | 163.10 |
Currency
| USD | USD | USD | USD |
Change
| −$2.60 (0.46%) | −$0.43 (0.94%) | −$1.52 (1.35%) | +$0.03 (0.02%) |
Market Cap
| 246.62 Bil | 32.57 Bil | 51.14 Bil | 439.02 Bil |
Industry
| Discount Stores | Grocery Stores | Discount Stores | Discount Stores |
Sector
|
Consumer Defensive
|
Consumer Defensive
|
Consumer Defensive
|
Consumer Defensive
|
* Trading data in this section is delayed by at least 15 minutes.
Yes. COST has a forward dividend yield of 0.73%.
See
COST’s full dividends and stock split history
on the Dividend tab.
Dividend yield allows investors, particularly those interested in dividend-paying stocks,
to compare the relationship between a stock’s price and how it rewards stockholders through dividends.
The formula for calculating dividend yield is to divide the annual dividend paid per share by the stock price.
Learn more about dividend yield.
COST’s market cap is 246.62 Bil.
Market capitalization is calculated by taking a company’s share price and multiplying it by the total number of shares.
It’s often used to measure a company’s size. In the Morningstar Style Box, large-cap names account for the
largest 70% of U.S. stocks, mid-cap names account for the largest 70–90%, and small-cap names are the remaining 10% of companies.
Learn more about market capitalization.
COST’s stock style is Large Core.
Style is an investment factor that has a meaningful impact on investment risk and returns.
Style is calculated by combining value and growth scores, which are first individually calculated.
High-growth stocks tend to represent the technology, healthcare, and communications sectors. They rarely distribute dividends to shareholders, opting for reinvestment in their businesses. More value-oriented stocks tend to represent financial services, utilities, and energy stocks. These are established companies that reliably pay dividends.
Learn more about style.
COST’s price/sales is 1.05.
Price/sales represents the amount an investor is willing to pay for a dollar generated from
a particular company’s sales or revenues.
COST’s price/forward earnings is 41.38.
Forward P/E gives some indication of how cheap or expensive a stock is compared with consensus earnings estimates.
The lower the Forward P/E, the cheaper the stock.
COST’s price/book is 10.50.
Price/book ratio can tell investors approximately how much they’re paying for a company’s assets,
based on historical, rather than current, valuations. Historical valuations generally do not reflect
a company’s current market value. Value investors frequently look for companies that have low price/book ratios.
See COST’s valuation ratios compared to the Market Index.
COST’s beta can be found in Trading Information at the top of this page.
A stock’s beta measures how closely tied its price movements have been to the performance of the overall market.
Compare COST’s historical performance against its industry peers and the overall market.
