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Costco Wholesale (COST) Stock Analysis

Here is a fundamental analysis of Costco Wholesale (COST), benchmarking its profitability, financial strength, dividend and valuation against its industry group peers.

Performance

Cumulative Growth

COST
GSPC
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Costco Wholesale (COST) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for Costco Wholesale (COST) and S&P 500 (GSPC). Returns over one year are annualized.

Performance at a Glance

Costco Wholesale (COST) metric values compared with Consumer Staples Distribution & Retail industry-group medians
MetricCurrent stock: COSTIndustry group median
1-Year Return-1.48%16.68%

Risk

Drawdown

COST
GSPC
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Costco Wholesale (COST) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Risk at a Glance

Costco Wholesale (COST) metric values compared with Consumer Staples Distribution & Retail industry-group medians
MetricCurrent stock: COSTIndustry group median
1-Year Volatility18.83%32.49%
Beta0.870.64

Company Profile

Company profile fields for Costco Wholesale (COST)
Profile ItemCOST
NameCostco Wholesale Corporation
Country/RegionUnited States
GICS SectorConsumer Staples
GICS Industry GroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
GICS Sub-IndustryConsumer Staples Merchandise Retail
Market Capitalization435.65 billion USD
CurrencyUSD
ExchangeNasdaq
Listing DateJuly 9, 1986
Security TypeCommon Stock

Valuation

Price-to-Earnings Ratio (TTM)

Costco Wholesale (COST) trades at P/E ratio of 49.51, in the richer earnings-multiple quartile for its industry. That premium needs support from growth, durable earnings, or stronger business quality.

COST

Consumer Staples Distribution & Retail industry group

49.51

Group distribution
Max
49.59
COST
49.51
Q3
40.27
Median
21.91
Q1
17.31
Min
11.33
Largest peers
COST
49.51
CASY
46.72
WMT
42.62
KR
42.02
SYY
22.00
TGT
17.86
DG
16.24
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Where Costco Wholesale (COST) stands on P/E ratio within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Price-to-Sales Ratio (TTM)

Costco Wholesale (COST) trades at 1.48 on P/S ratio, in the higher sales-valuation quartile. Investors are paying up for each dollar of revenue, so stronger margins, growth, or revenue quality need to carry that price.

COST

Consumer Staples Distribution & Retail industry group

1.48

Group distribution
Max
1.89
COST
1.48
Q3
0.91
Median
0.52
Q1
0.26
Min
0.02
Largest peers
CASY
1.89
COST
1.48
WMT
1.33
DG
0.59
TGT
0.58
SYY
0.45
KR
0.27
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Where Costco Wholesale (COST) stands on P/S ratio within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Price-to-Book Ratio (MRQ)

Costco Wholesale (COST) trades at 26.35 on P/B ratio, above the industry benchmark range. Investors are putting an unusually rich price on each dollar of book equity relative to peers.

COST

Consumer Staples Distribution & Retail industry group

26.35

Group distribution
COST
26.35
Max
9.68
Q3
6.23
Median
4.10
Q1
2.15
Min
0.76
Largest peers
COST
26.35
SYY
16.61
WMT
9.68
CASY
8.37
KR
6.99
TGT
3.75
DG
2.86
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Where Costco Wholesale (COST) stands on P/B ratio within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Valuation at a Glance

Costco Wholesale (COST) metric values compared with Consumer Staples Distribution & Retail industry-group medians
MetricCurrent stock: COSTIndustry group median
Price-to-Earnings Ratio (TTM)49.5121.91
Price-to-Sales Ratio (TTM)1.480.52
Price-to-Book Ratio (MRQ)26.354.10
Free Cash Flow Yield1.60%4.72%

Profitability

Return on Equity (TTM)

Costco Wholesale (COST) posts ROE of 29.15%, in the upper peer quartile. That suggests the company earns more from each dollar of shareholders’ equity than most industry peers, a useful capital-efficiency signal.

COST

Consumer Staples Distribution & Retail industry group

29.15%

Group distribution
Max
37.28%
COST
29.15%
Q3
22.55%
Median
14.81%
Q1
8.71%
Min
-2.30%
Largest peers
SYY
81.90%
COST
29.15%
WMT
24.13%
TGT
22.02%
CASY
19.15%
DG
18.91%
KR
14.41%
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Where Costco Wholesale (COST) stands on ROE within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Net Profit Margin (TTM)

Costco Wholesale (COST) keeps 3.01% of revenue as net profit, roughly in line with the peer group’s normal net margin range. Its full cost stack is taking a typical share of sales for the industry.

COST

Consumer Staples Distribution & Retail industry group

3.01%

Group distribution
Max
6.51%
Q3
3.51%
COST
3.01%
Median
2.17%
Q1
1.27%
Min
-0.12%
Largest peers
CASY
4.07%
DG
3.63%
TGT
3.24%
WMT
3.14%
COST
3.01%
SYY
2.08%
KR
0.69%
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Where Costco Wholesale (COST) stands on net margin within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Operating Profit Margin (TTM)

Costco Wholesale (COST) turns 3.67% of revenue into operating profit, roughly in line with the peer group’s normal operating margin range. Its core cost structure looks typical for the industry.

COST

Consumer Staples Distribution & Retail industry group

3.67%

Group distribution
Max
9.24%
Q3
5.12%
COST
3.67%
Median
3.55%
Q1
1.19%
Min
-0.11%
Largest peers
DG
5.92%
CASY
5.14%
TGT
4.52%
WMT
4.22%
SYY
3.75%
COST
3.67%
KR
3.44%
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Where Costco Wholesale (COST) stands on operating margin within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Profitability at a Glance

Costco Wholesale (COST) metric values compared with Consumer Staples Distribution & Retail industry-group medians
MetricCurrent stock: COSTIndustry group median
Return on Equity (TTM)29.15%14.81%
Return on Assets (TTM)8.67%5.63%
Net Profit Margin (TTM)3.01%2.17%
Operating Profit Margin (TTM)3.67%3.55%
Gross Profit Margin (TTM)12.88%24.79%

Financial Strength

Current Ratio (MRQ)

Costco Wholesale (COST) has current ratio of 1.07, in the healthier middle range for its industry. The short-term asset cushion looks balanced relative to peers rather than stretched thin.

COST

Consumer Staples Distribution & Retail industry group

1.07

Group distribution
Max
1.52
Q3
1.36
Median
1.17
COST
1.07
Q1
0.95
Min
0.60
Largest peers
SYY
1.33
DG
1.17
COST
1.07
CASY
1.01
TGT
0.93
KR
0.80
WMT
0.77
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Where Costco Wholesale (COST) stands on current ratio within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Debt-to-Equity Ratio (MRQ)

Costco Wholesale (COST) has debt-to-equity ratio of 0.60, in the lower-leverage quartile for its industry. Borrowing is modest relative to equity compared with most peers, which can leave more flexibility through a cycle.

COST

Consumer Staples Distribution & Retail industry group

0.60

Group distribution
Max
3.40
Q3
1.93
Median
1.29
Q1
0.65
COST
0.60
Min
0.00
Largest peers
SYY
6.70
KR
4.16
DG
1.79
TGT
1.18
WMT
0.75
CASY
0.73
COST
0.60
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Where Costco Wholesale (COST) stands on debt-to-equity ratio within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Financial Strength at a Glance

Costco Wholesale (COST) metric values compared with Consumer Staples Distribution & Retail industry-group medians
MetricCurrent stock: COSTIndustry group median
Current Ratio (MRQ)1.071.17
Debt-to-Equity Ratio (MRQ)0.601.29
Net Debt / EBITDA-0.072.59

Dividends

Dividend Yield (TTM)

Costco Wholesale (COST) has dividend yield of 0.60%, in the industry’s normal income range. It provides a meaningful dividend without the red flag of an unusually high headline yield.

COST

Consumer Staples Distribution & Retail industry group

0.60%

Group distribution
Max
4.41%
Q3
2.02%
Median
0.66%
COST
0.60%
Q1
0.00%
Min
0.00%
Largest peers
TGT
3.43%
SYY
2.78%
KR
2.16%
DG
2.06%
WMT
0.82%
COST
0.60%
CASY
0.26%
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Where Costco Wholesale (COST) stands on dividend yield within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

Costco Wholesale (COST) has payout ratio of 27.01%, within the industry’s typical payout band. The dividend shares profits with investors while leaving earnings coverage that looks normal for the peer group.

COST

Consumer Staples Distribution & Retail industry group

27.01%

Group distribution
Max
60.00%
Q3
31.85%
COST
27.01%
Median
16.54%
Q1
0.00%
Min
0.00%
Largest peers
KR
87.01%
SYY
60.00%
TGT
59.97%
WMT
33.54%
DG
33.38%
COST
27.01%
CASY
11.90%
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Where Costco Wholesale (COST) stands on payout ratio within its Consumer Staples Distribution & Retail peer group — the box is the group’s distribution and the dots its largest members.

Dividends at a Glance

Costco Wholesale (COST) metric values compared with Consumer Staples Distribution & Retail industry-group medians
MetricCurrent stock: COSTIndustry group median
Dividend Yield (TTM)0.60%0.66%
Dividend Payout Ratio (TTM)27.01%16.54%