Costco Wholesale Corporation (COST) is in the discount store industry which belongs to the consumer staples sector. Costco, founded in 1983, is currently run by President & CEO, W. Craig Jelinek, and is headquartered in Issaquah, Washington, U.S.
My valuation metrics show that COST is a HOLD.
Costco Food Court Menu & Prices in Canada
| Food Court Menu Item | Price | Calories |
|---|---|---|
| 1/4 Pound All Beef Hot Dog & 20 oz Fountain Drink | $1.50 | 540-940 |
| 1/4 Pound Polish Sausage & 20 oz Fountain Drink | $1.50 | 540-940 |
| Slice of Cheese or Pepperoni Pizza | $2.59 | 650-670 |
| 18″ Cheese or Pepperoni Pizza | $12.99 | 3,900-4020 |
| Chicken Strips & Fries | $6.99 | 1,300 |
| French Fries | $2.99 | 910 |
| Poutine | $5.99 | 1,890 |
| Gravy | $0.30 | 45 |
| 20 oz. Fountain Drink with Refills | $0.89 | 0-390 |
| Ice Cream Cone (Vanilla, Chocolate or Twist) | $2.89 | 610-640 |
| Vanilla Ice Cream Sundae (Caramel, Chocolate Sauce or Berry Topping) | $3.49 | 670-740 |
| Food Court Menu Item | Price | Calories |
Costco Wholesale Corporation Company Overview
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box retail stores. The company opened its first warehouse (the chain’s term for its retail outlets) in Seattle in 1983. Through mergers, however, Costco’s corporate history dates back to 1976, when its former competitor Price Club was founded in San Diego, California. As of November 2022, Costco has 842 warehouses worldwide: 579 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one each in Iceland, New Zealand and Sweden.
Costco Stock Analysis vs. Competitors
In order to get an in-depth look at Costco Wholesale Corporation (COST), let’s see how this company performs relative to its sector competitors. In this table, I compare company metrics to determine if there are better opportunities. These companies include Walmart Inc. (WMT), Target Corporation (TGT), Dollar General Corporation (DG) and Dollar Tree, Inc. (DLTR).
| Metric | WMT | COST | TGT | DG | DLTR |
| Beta | 1.41 | 0.71 | 1.03 | 0.38 | 0.72 |
| EV/EBITBA | 71.22 | 21.37 | 10.74 | 15.49 | 12.13 |
| P/E | 38.39 | 37.50 | 18.67 | 25.30 | 23.59 |
| Yield (%) | 0.00 | 0.68 | 2.80 | 0.83 | 4.83 |
| P/B | 12.78 | 11.07 | 6.47 | 9.22 | 1.37 |
| P/S | 7.60 | 1.01 | 0.77 | 1.63 | 4.62 |
| C/S | 13.12 | 24.92 | 12.34 | 1.49 | 1.46 |
| Current Ratio | 1.85 | 1.02 | 0.82 | 1.02 | 78.82 |
| Margin (%) | 80.71 | 12.15 | 29.28 | 31.60 | 29.40 |
| 1YR (%) | -52.34 | -5.21 | -34.43 | 9.75 | 28.15 |
| ROIC (%) | 1.14 | 12.90 | 17.76 | 12.34 | 8.54 |
| REV (Y/Y) (%) | 50.97 | 15.83 | 7.50 | 4.99 | 5.44 |
- AUM – Assets Under Management
- Beta – the measure of the volatility of a stock compared to the market
- C/S: Cash per Share – the percentage of a company’s share price available to spend on growing the corporation
- Current: Current Ratio – a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year
- Distributions – Dividend Distributions
- Dividend Date – the date that a company announces it is paying a dividend
- Earnings: Earnings Date – the next release of a company’s financial report
- ETF – Exchange Traded Fund
- EV/EBITDA: Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization – this ratio compares the value of a company, including debt, to the company’s cash earnings less non-cash expenses
- Ex-Dividend: Ex-Dividend Date – the dividend will be received if bought at least one day before this date
- Holdings: Number of Holdings – the total number of different holdings of a fund
- Inception: Inception Date – the date of the first subscription for units of the fund
- Industry: companies that have a lot in common
- Margin (%): Gross Margin – the percentage of money a corporation has left after subtracting all direct costs of producing or purchasing the goods or services it sells
- Market Cap: Market Capitalization – the total value of all a corporation’s stock
- N/A: Not Applicable or Not Available
- P/B: Price-to-Book – this ratio measures the market’s valuation of a company relative to its book value
- P/E: Price-to-Earnings – this ratio relates a corporation’s share price to its earnings per share
- ROIC (%): Return on Invested Capital – assess a corporation’s efficiency in allocating capital to profitable investments
- Manager – Fund or Portfolio Manager
- Margin (%): Gross Margin – the percentage of money a corporation has left after subtracting all direct costs of producing or purchasing the goods or services it sells
- Market Cap (B): the total dollar market value of a company’s outstanding shares of stock in billions
- MER – Management Expense Ratio
- N/A – Not Applicable or Not Available
- P/B: Price-to-Book – this ratio measures the market’s valuation of a company relative to its book value
- P/E: Price-to-Earnings – this ratio relates a corporation’s share price to its earnings per share
- P/S: Price-to-Sales – this ratio divides the stock price by the underlying corporation’s sales per share
- Payout: Payout Ratio – the percentage of net income a firm pays in dividends
- Price: Stock Price – current value to buyers and sellers
- REV Y/Y (%): Yearly Revenue Growth – the percentage growth of the corporation’s revenue over the trailing twelve months
- Risk – Risk Rating (Volatility)
- Sector: group broadly similar companies
- Yield – Dividend or Distribution Yield
- YTD – Year to Date
- 1M – 1-Month Performance
- 3M – 3-Month Performance
- 1Y – 1-Year Performance
- 3Y – 3-Year Performance
- 5Y – 5-Year Performance
- 10Y – 10-Year Performance
- 15Y – 15-Year Performance
- 52-Week Range – the lowest and highest price at which a stock has traded during the previous 52-weeks
Costco Stock Price Forecast
With data analyzed at the time of the report, I believe this company is worth $448.66 and rate this company a HOLD.
Conclusion
When taking a close look at the current largest discount stores, the company we believe with the most upside potential is Dollar Tree, Inc. (DLTR).
