NasdaqGS: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.

Snowflake

Fundamentals

Outstanding track record with adequate balance sheet and pays a dividend.


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


Market Performance


7 Day Return

1.8%

COST

-0.0006%

US Consumer Retailing

0.4%

US Market


1 Year Return

31.9%

COST

14.4%

US Consumer Retailing

6.9%

US Market

Return vs Industry: COST exceeded the US Consumer Retailing industry which returned 14.4% over the past year.

Return vs Market: COST exceeded the US Market which returned 6.9% over the past year.


Shareholder returns

COSTIndustryMarket
7 Day1.8%-0.0006%0.4%
30 Day3.6%1.3%-1.2%
90 Day7.6%5.5%-0.4%
1 Year33.2%31.9%16.6%14.4%9.3%6.9%
3 Year118.6%103.3%56.5%46.5%45.8%36.4%
5 Year163.5%132.2%69.0%50.7%62.9%45.1%

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

Valuation

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

36.4x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: COST ($302.86) is trading above our estimate of fair value ($207.43)

Significantly Undervalued: COST is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: COST is poor value based on its PE Ratio (36.4x) compared to the Consumer Retailing industry average (20x).

PE vs Market: COST is poor value based on its PE Ratio (36.4x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: COST is poor value based on its PEG Ratio (5.8x)


Price to Book Ratio

PB vs Industry: COST is overvalued based on its PB Ratio (8.7x) compared to the US Consumer Retailing industry average (2.1x).


Next Steps

Future Growth

How is Costco Wholesale forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

6.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COST's forecast earnings growth (6.2% per year) is above the savings rate (2.7%).

Earnings vs Market: COST's earnings (6.2% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: COST's revenue (6.5% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: COST's revenue (6.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: COST's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has Costco Wholesale performed over the past 5 years?

11.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: COST's earnings have grown by 11.2% per year over the past 5 years.

Accelerating Growth: COST's earnings growth over the past year (16.8%) exceeds its 5-year average (11.2% per year).

Earnings vs Industry: COST earnings growth over the past year (16.8%) exceeded the Consumer Retailing industry -14.2%.


Return on Equity

High ROE: COST's Return on Equity (23.8%) is considered high.


Return on Assets

ROA vs Industry: COST has a higher Return on Assets than the Consumer Retailing industry average last year.


Return on Capital Employed

ROCE Improving: COST has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Costco Wholesale's financial position?


Financial Position Analysis

Short Term Liabilities: COST's short term assets ($23.5B) exceeds its short term liabilities ($23.2B)

Long Term Liabilities: COST's short term assets (23.5B) exceeds its long term liabilities (6.6B)


Debt to Equity History and Analysis

Debt Level: COST's debt to equity ratio (43.8%) is considered high

Reducing Debt: COST's debt to equity ratio has increased from 40.7% to 43.8% over the past 5 years.

Debt Coverage: COST's debt is well covered by operating cash flow (93.2%).

Interest Coverage: COST's interest payments on its debt are well covered by EBIT (197.4x 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 3.442030x debt).


Next Steps

Dividend

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

0.86%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years0.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: COST's dividend (0.86%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: COST's dividend (0.86%) is low compared to the top 25% of dividend payers in the US market (3.73%).

Stable Dividend: COST's dividends per share have been stable in the past 10 years.

Growing Dividend: COST's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.3%), COST's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: COST's dividends in 3 years are forecast to be well covered by earnings (26.5% payout ratio).


Next Steps

Management

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

15.1yrs

Average management tenure


CEO

W. Jelinek (67yo)

7.8yrs

Tenure

US$7,408,513

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 ($USD7.41M) is below average for companies of similar size in the US market ($USD11.18M).

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


Management Age and Tenure

15.1yrs

Average Tenure

66.5yo

Average Age

Experienced Management: COST's management team is seasoned and experienced (15.1 years average tenure).


Board Age and Tenure

9.7yrs

Average Tenure

65.5yo

Average Age

Experienced Board: COST's board of directors are considered experienced (9.7 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$99,06815 Oct 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares333
Max PriceUS$297.50
SellUS$1,781,18611 Oct 19
Paul Moulton
EntityIndividual
Role
Chief Information Officer
Executive VP & Chief Information Officer
Shares5,976
Max PriceUS$298.06
SellUS$441,54005 Jul 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,646
Max PriceUS$268.25
SellUS$988,82324 Jun 19
Ron Vachris
EntityIndividual
Shares3,700
Max PriceUS$267.25
SellUS$2,658,52820 Jun 19
James Murphy
EntityIndividual
Role
Senior Key Executive
Executive VP & COO of International
Shares10,000
Max PriceUS$265.85
SellUS$799,17820 Jun 19
Richard Galanti
EntityIndividual
Role
Member of the Board of Directors
Executive VP
Shares3,000
Max PriceUS$266.39
SellUS$710,39310 Jun 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,790
Max PriceUS$256.00
SellUS$1,515,62610 Jun 19
Daniel Hines
EntityIndividual
Shares6,000
Max PriceUS$252.65
SellUS$504,30810 Jun 19
Patrick Callans
EntityIndividual
Role
Chief Administrative Officer
Executive Vice President of Administration
Shares2,000
Max PriceUS$252.15
SellUS$1,277,66910 Jun 19
James Klauer
EntityIndividual
Shares5,000
Max PriceUS$255.80
BuyUS$727,93502 Apr 19
John Meisenbach
EntityIndividual
Role
Member of the Board of Directors
Director
Shares3,000
Max PriceUS$242.65
SellUS$564,00028 Mar 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,350
Max PriceUS$240.00
SellUS$1,405,62413 Mar 19
Timothy Rose
EntityIndividual
Shares6,000
Max PriceUS$234.27
SellUS$2,688,38813 Mar 19
Joseph Portera
EntityIndividual
Role
Senior Key Executive
Executive VP
Shares11,765
Max PriceUS$228.53
SellUS$1,905,93413 Mar 19
Paul Moulton
EntityIndividual
Role
Chief Information Officer
Executive VP & Chief Information Officer
Shares8,189
Max PriceUS$232.74
SellUS$965,19713 Mar 19
Richard Galanti
EntityIndividual
Role
Member of the Board of Directors
Executive VP
Shares4,188
Max PriceUS$231.40
SellUS$475,36813 Mar 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,049
Max PriceUS$232.00
SellUS$332,10804 Jan 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,611
Max PriceUS$206.50
SellUS$151,49503 Jan 19
Susan Decker
EntityIndividual
Role
Member of the Board of Directors
Director
Shares739
Max PriceUS$205.00
SellUS$945,94001 Nov 18
Richard Galanti
EntityIndividual
Role
Member of the Board of Directors
Executive VP
Shares4,163
Max PriceUS$227.23
SellUS$5,029,10630 Oct 18
W. Jelinek
EntityIndividual
Role
Chief Executive Officer
President
Shares22,500
Max PriceUS$225.60
SellUS$458,97626 Oct 18
Richard Libenson
EntityIndividual
Role
Director Emeritus
Consultant and Director Emeritus
Shares2,049
Max PriceUS$224.00
SellUS$5,215,45526 Oct 18
Franz Lazarus
EntityIndividual
Shares23,000
Max PriceUS$226.76

Ownership Breakdown


Management Team

  • Richard Galanti (63yo)

    Executive VP

    • Tenure: 24.8yrs
    • Compensation: US$4.29m
  • W. Jelinek (67yo)

    President

    • Tenure: 7.8yrs
    • Compensation: US$7.41m
  • Joseph Portera (67yo)

    Executive VP

    • Tenure: 25.2yrs
    • Compensation: US$4.10m
  • Paul Moulton (68yo)

    Executive VP & Chief Information Officer

    • Tenure: 0yrs
    • Compensation: US$4.02m
  • James Murphy (66yo)

    Executive VP & COO of International

    • Tenure: 15.1yrs
    • Compensation: US$3.98m
  • Richard Chavez

    Senior Vice President of Costco Wholesale Industries & Business Development

    • Tenure: 0yrs
  • Bob Nelson

    Senior Vice President of Financial Planning & Investor Relations

    • Tenure: 0yrs
  • John Sullivan

    Senior VP

    • Tenure: 0yrs
  • Pat Callans (57yo)

    Executive Vice President of Administration

    • Tenure: 0.8yrs
  • Paul Latham

    Senior Vice President of Membership

    • Tenure: 0yrs

Board Members

  • Jeff Raikes (61yo)

    Director

    • Tenure: 10.8yrs
    • Compensation: US$302.50k
  • Richard Galanti (63yo)

    Executive VP

    • Tenure: 24.8yrs
    • Compensation: US$4.29m
  • W. Jelinek (67yo)

    President

    • Tenure: 7.8yrs
    • Compensation: US$7.41m
  • Sue Decker (56yo)

    Director

    • Tenure: 15yrs
    • Compensation: US$305.50k
  • Maggie Wilderotter (64yo)

    Director

    • Tenure: 4yrs
    • Compensation: US$308.50k
  • Charlie Munger (95yo)

    Director

    • Tenure: 22.8yrs
    • Compensation: US$309.50k
  • John Stanton (64yo)

    Director

    • Tenure: 4yrs
    • Compensation: US$311.50k
  • John Meisenbach (83yo)

    Director

    • Tenure: 0yrs
    • Compensation: US$297.50k
  • Tony James (68yo)

    Chairman of the Board

    • Tenure: 2.2yrs
    • Compensation: US$297.50k
  • Richard Libenson (77yo)

    Consultant and Director Emeritus

    • Tenure: 2.8yrs
    • 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: NasdaqGS
  • Founded: 1976
  • Industry: Hypermarkets and Super Centers
  • Sector: Consumer Retailing
  • Market Cap: US$133.145b
  • Shares outstanding: 439.63m
  • 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
COSTWBAG (Wiener Boerse AG)YesCommon StockATEUROct 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, I ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 23:33
End of Day Share Price2019/10/18 00:00
Earnings2019/09/01
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.