WBAG:COST

Stock Analysis Report

Executive Summary

Costco Wholesale Corporation, together with its subsidiaries, operates membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan.

Rewards

Trading at 10.4% below its fair value

Earnings are forecast to grow 7.77% per year

Earnings grew by 14.6% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Outstanding track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Costco Wholesale's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: COST has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

COST

0.2%

AT Consumer Retailing

-0.8%

AT Market


1 Year Return

53.6%

COST

0.6%

AT Consumer Retailing

4.0%

AT Market

Return vs Industry: COST exceeded the Austrian Consumer Retailing industry which returned 4.8% over the past year.

Return vs Market: COST exceeded the Austrian Market which returned 9.1% over the past year.


Shareholder returns

COSTIndustryMarket
7 Day3.6%0.2%-0.8%
30 Day7.5%-1.8%-1.6%
90 Day5.9%0.5%-1.2%
1 Year55.1%53.6%4.6%0.6%7.7%4.0%
3 Yearn/a2.7%-7.5%29.3%17.5%
5 Yearn/a14.5%-3.2%69.7%46.0%

Price Volatility Vs. Market

How volatile is Costco Wholesale's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Costco Wholesale undervalued compared to its fair value and its price relative to the market?

7.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: COST (€269.2) is trading below our estimate of fair value (€300.55)

Significantly Below Fair Value: COST is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: COST is poor value based on its PE Ratio (35.4x) compared to the Consumer Retailing industry average (19.2x).

PE vs Market: COST is poor value based on its PE Ratio (35.4x) compared to the Austrian market (14.7x).


Price to Earnings Growth Ratio

PEG Ratio: COST is poor value based on its PEG Ratio (4.5x)


Price to Book Ratio

PB vs Industry: COST is overvalued based on its PB Ratio (8.4x) compared to the XE Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

How is Costco Wholesale forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

7.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COST's forecast earnings growth (7.8% per year) is above the savings rate (-0.1%).

Earnings vs Market: COST's earnings (7.8% per year) are forecast to grow slower than the Austrian market (8.8% per year).

High Growth Earnings: COST's earnings are forecast to grow, but not significantly.

Revenue vs Market: COST's revenue (6.6% per year) is forecast to grow faster than the Austrian market (2.5% per year).

High Growth Revenue: COST's revenue (6.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: COST's Return on Equity is forecast to be high in 3 years time (21.5%)


Next Steps

Past Performance

How has Costco Wholesale performed over the past 5 years?

11.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: COST has high quality earnings.

Growing Profit Margin: COST's current net profit margins (2.4%) are higher than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: COST's earnings have grown by 11.5% per year over the past 5 years.

Accelerating Growth: COST's earnings growth over the past year (14.6%) exceeds its 5-year average (11.5% per year).

Earnings vs Industry: COST earnings growth over the past year (14.6%) exceeded the Consumer Retailing industry 0.5%.


Return on Equity

High ROE: COST's Return on Equity (23.3%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Costco Wholesale's financial position?


Financial Position Analysis

Short Term Liabilities: COST's short term assets ($26.6B) exceed its short term liabilities ($26.3B).

Long Term Liabilities: COST's short term assets ($26.6B) exceed its long term liabilities ($8.9B).


Debt to Equity History and Analysis

Debt Level: COST's debt to equity ratio (42%) is considered high.

Reducing Debt: COST's debt to equity ratio has increased from 40.2% to 42% over the past 5 years.

Debt Coverage: COST's debt is well covered by operating cash flow (92.3%).

Interest Coverage: COST's interest payments on its debt are well covered by EBIT (323.3x coverage).


Balance Sheet

Inventory Level: COST has a high level of physical assets or inventory.

Debt Coverage by Assets: COST's debt is covered by short term assets (assets are 3.9x debt).


Next Steps

Dividend

What is Costco Wholesale's current dividend yield, its reliability and sustainability?

0.84%

Current Dividend Yield


Dividend Yield vs Market

company0.8%marketbottom25%1.6%markettop25%4.3%industryaverage3.5%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: COST's dividend (0.87%) isn’t notable compared to the bottom 25% of dividend payers in the Austrian market (1.6%).

High Dividend: COST's dividend (0.87%) is low compared to the top 25% of dividend payers in the Austrian market (4.17%).


Stability and Growth of Payments

Stable Dividend: COST is not paying a notable dividend for the Austrian market, therefore no need to check if payments are stable.

Growing Dividend: COST is not paying a notable dividend for the Austrian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: COST is not paying a notable dividend for the Austrian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of COST's dividend in 3 years as they are not forecast to pay a notable one for the Austrian market.


Next Steps

Management

What is the CEO of Costco Wholesale's salary, the management and board of directors tenure and is there insider trading?

15.3yrs

Average management tenure


CEO

W. Jelinek (67yo)

8yrs

Tenure

US$8,016,200

Compensation

Mr. W. Craig Jelinek has been the President and Chief Executive Officer of Costco Wholesale Corporation since February 2010 and January 1, 2012 respectively and served as its Executive Vice President of Me ...


CEO Compensation Analysis

Compensation vs Market: W.'s total compensation ($USD8.02M) is above average for companies of similar size in the Austrian market ($USD3.76M).

Compensation vs Earnings: W.'s compensation has been consistent with company performance over the past year.


Management Age and Tenure

15.3yrs

Average Tenure

66.5yo

Average Age

Experienced Management: COST's management team is seasoned and experienced (15.3 years average tenure).


Board Age and Tenure

7.1yrs

Average Tenure

64yo

Average Age

Experienced Board: COST's board of directors are considered experienced (9.9 years average tenure).


Insider Trading

Insider Buying: COST insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Sell€1,039,63815 Jan 20
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,850
Max Price€270.04
Sell€1,588,14318 Dec 19
Ron Vachris
EntityIndividual
Shares6,000
Max Price€264.69
Sell€527,71817 Dec 19
Patrick Callans
EntityIndividual
Role
Chief Administrative Officer
Executive Vice President of Administration
Shares2,000
Max Price€263.86
Sell€467,11218 Nov 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,703
Max Price€274.29
Sell€545,97413 Nov 19
Richard Galanti
EntityIndividual
Role
Member of the Board of Directors
Executive VP
Shares1,984
Max Price€275.19
Sell€274,82108 Nov 19
Russell Miller
EntityIndividual
Shares1,000
Max Price€274.82
Sell€1,094,01408 Nov 19
Paul Moulton
EntityIndividual
Role
Chief Information Officer
Executive VP & Chief Information Officer
Shares3,978
Max Price€275.02
Sell€3,795,76131 Oct 19
Joseph Portera
EntityIndividual
Role
Senior Key Executive
Executive VP
Shares14,095
Max Price€269.30
Sell€456,66531 Oct 19
Richard Libenson
EntityIndividual
Role
Director Emeritus
Consultant and Director Emeritus
Shares1,703
Max Price€268.15
Sell€1,341,71324 Oct 19
Daniel Hines
EntityIndividual
Shares5,000
Max Price€268.34
Sell€607,80218 Oct 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,236
Max Price€272.05
Sell€89,65615 Oct 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares333
Max Price€269.24
Sell€1,611,97411 Oct 19
Paul Moulton
EntityIndividual
Role
Chief Information Officer
Executive VP & Chief Information Officer
Shares5,976
Max Price€269.74
Sell€391,42505 Jul 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,646
Max Price€237.80
Sell€867,39524 Jun 19
Ron Vachris
EntityIndividual
Shares3,700
Max Price€234.43
Sell€2,358,11420 Jun 19
James Murphy
EntityIndividual
Role
Senior Key Executive
Executive VP & COO of International Division
Shares10,000
Max Price€235.81
Sell€708,87120 Jun 19
Richard Galanti
EntityIndividual
Role
Member of the Board of Directors
Executive VP
Shares3,000
Max Price€236.29
Sell€626,56710 Jun 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,790
Max Price€225.79
Sell€1,336,78210 Jun 19
Daniel Hines
EntityIndividual
Shares6,000
Max Price€222.84
Sell€444,80010 Jun 19
Patrick Callans
EntityIndividual
Role
Chief Administrative Officer
Executive Vice President of Administration
Shares2,000
Max Price€222.40
Sell€1,126,90410 Jun 19
James Klauer
EntityIndividual
Shares5,000
Max Price€225.61
Buy€649,02702 Apr 19
John Meisenbach
EntityIndividual
Shares3,000
Max Price€216.34
Sell€499,64828 Mar 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,350
Max Price€212.62
Sell€1,243,41513 Mar 19
Timothy Rose
EntityIndividual
Shares6,000
Max Price€207.24
Sell€2,393,74113 Mar 19
Joseph Portera
EntityIndividual
Role
Senior Key Executive
Executive VP
Shares11,765
Max Price€203.48
Sell€1,688,46713 Mar 19
Paul Moulton
EntityIndividual
Role
Chief Information Officer
Executive VP & Chief Information Officer
Shares8,189
Max Price€206.19
Sell€855,06813 Mar 19
Richard Galanti
EntityIndividual
Role
Member of the Board of Directors
Executive VP
Shares4,188
Max Price€205.00
Sell€421,12913 Mar 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,049
Max Price€205.53

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Richard Galanti (63yo)

    Executive VP

    • Tenure: 25yrs
    • Compensation: US$4.44m
  • W. Jelinek (67yo)

    President

    • Tenure: 8yrs
    • Compensation: US$8.02m
  • Joseph Portera (67yo)

    Executive VP

    • Tenure: 25.4yrs
    • Compensation: US$4.15m
  • Paul Moulton (68yo)

    Executive VP & Chief Information Officer

    • Compensation: US$4.09m
  • James Murphy (66yo)

    Executive VP & COO of International Division

    • Tenure: 15.3yrs
    • Compensation: US$4.04m
  • Richard Chavez

    Senior Vice President of Costco Wholesale Industries & Business Development

    • Bob Nelson

      Senior Vice President of Financial Planning & Investor Relations

      • John Sullivan

        Senior VP

        • Pat Callans (57yo)

          Executive Vice President of Administration

          • Tenure: 1yrs
        • Paul Latham

          Senior Vice President of Membership


          Board Members

          • Jeff Raikes (61yo)

            Independent Director

            • Tenure: 11.1yrs
            • Compensation: US$305.07k
          • Ken Denman (60yo)

            Independent Director

            • Tenure: 2.8yrs
            • Compensation: US$313.07k
          • Richard Galanti (63yo)

            Executive VP

            • Tenure: 25yrs
            • Compensation: US$4.44m
          • W. Jelinek (67yo)

            President

            • Tenure: 8yrs
            • Compensation: US$8.02m
          • Sue Decker (56yo)

            Independent Director

            • Tenure: 15.3yrs
            • Compensation: US$308.07k
          • Maggie Wilderotter (64yo)

            Independent Director

            • Tenure: 4.3yrs
            • Compensation: US$305.07k
          • Charlie Munger (95yo)

            Independent Director

            • Tenure: 23yrs
            • Compensation: US$308.07k
          • John Stanton (64yo)

            Independent Director

            • Tenure: 4.3yrs
            • Compensation: US$300.07k
          • Tony James (68yo)

            Independent Chairman of the Board

            • Tenure: 2.4yrs
            • Compensation: US$298.07k
          • Richard Libenson (77yo)

            Consultant and Director Emeritus

            • Tenure: 3yrs
            • Compensation: US$689.17k

          Company Information

          Costco Wholesale Corporation's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Costco Wholesale Corporation
          • Ticker: COST
          • Exchange: WBAG
          • Founded: 1976
          • Industry: Hypermarkets and Super Centers
          • Sector: Consumer Retailing
          • Market Cap: US$137.170b
          • Listing Market Cap: US$124.400b
          • Shares outstanding: 441.76m
          • Website: https://www.costco.com

          Number of Employees


          Location

          • Costco Wholesale Corporation
          • 999 Lake Drive
          • Issaquah
          • Washington
          • 98027
          • United States

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          COSTNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 1993
          CTODB (Deutsche Boerse AG)YesCommon StockDEEUROct 1993
          COST *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1993
          COSTSNSE (Santiago Stock Exchange)YesCommon StockCLUSDOct 1993
          0I47LSE (London Stock Exchange)YesCommon StockGBUSDOct 1993
          COSTWBAG (Wiener Boerse AG)YesCommon StockATEUROct 1993
          CTOETLX (Eurotlx)YesCommon StockITEUROct 1993
          COWC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1/4 COM USD0.005BRBRLApr 2016

          Biography

          Costco Wholesale Corporation, together with its subsidiaries, operates membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. The company provides dry and packaged foods, and groceries; snack foods, candies, alcoholic and nonalcoholic beverages, and cleaning supplies; appliances, electronics, health and beauty aids, hardware, and garden and patio products; meat, bakery, and deli products, as well as produce; and apparel and small appliances. It also operates gas stations, pharmacies, optical dispensing centers, food courts, and hearing-aid centers; and offers business delivery, travel, and various other services online in various countries. As of September 1, 2019, the company operated 782 warehouses, including 543 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in South Korea, 13 in Taiwan, 11 in Australia, 2 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce Websites in the United States, Canada, the United Kingdom, Mexico, South Korea, and Taiwan. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/26 22:55
          End of Day Share Price2020/01/24 00:00
          Earnings2019/11/24
          Annual Earnings2019/09/01


          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.