Core Viewpoint - Costco's stock performance has shown resilience, with a recent increase and positive earnings expectations, indicating a favorable outlook for the company in the retail sector [1][2][3]. Company Performance - Costco's stock closed at $991.70, reflecting a +1.34% increase, outperforming the S&P 500's gain of 0.58% [1]. - Over the past month, Costco shares have appreciated by 3.46%, contrasting with the Retail-Wholesale sector's decline of 0.19% and the S&P 500's loss of 0.84% [1]. - The upcoming earnings report on May 29, 2025, is anticipated to show earnings of $4.24 per share, representing a year-over-year growth of 12.17% [2]. - For the fiscal year, earnings are projected at $17.95 per share, with revenue expected to reach $274.23 billion, marking increases of +11.42% and +7.77% respectively from the previous year [3]. Analyst Estimates - Recent changes in analyst estimates for Costco are crucial, as they reflect short-term business trends and can indicate optimism about the company's outlook [4]. - The Zacks Rank system, which incorporates these estimate changes, currently rates Costco at 3 (Hold), with a recent upward shift of 0.06% in the consensus EPS estimate [6]. Valuation Metrics - Costco has a Forward P/E ratio of 54.51, significantly higher than the industry average of 21.76, suggesting that Costco is trading at a premium [7]. - The company also has a PEG ratio of 5.84, compared to the Retail - Discount Stores industry's average PEG ratio of 2.71, indicating a higher valuation relative to expected earnings growth [8]. Industry Context - The Retail - Discount Stores industry, part of the broader Retail-Wholesale sector, holds a Zacks Industry Rank of 83, placing it in the top 34% of over 250 industries [9].

Company Overview - Costco operates nearly 900 club stores globally, generating over 50% of its gross profit from membership fees, which allows for lower product margins compared to competitors [2] - Realty Income is a net lease REIT with over 15,600 single-tenant properties, primarily in retail, and has a market cap more than three times larger than its closest competitor [5] Financial Performance - Costco has maintained a membership renewal rate above 90% and has increased its dividend annually for over two decades, with an average annualized growth rate of 12% over the past 10 years [3] - Realty Income has increased its dividend annually for three decades, but its annualized dividend growth rate is only 4.3%, which may not attract growth investors [6] Dividend Analysis - Costco's current dividend yield is 0.5%, lower than the S&P 500 index's 1.3%, making it less appealing for dividend growth investors despite its rapid dividend growth [4] - Realty Income offers a more attractive dividend yield of 5.6%, appealing to income investors, especially given its long history of dividend increases [6] Market Position - Both Costco and Realty Income are down approximately 10% from their 52-week highs, with Realty Income down over 25% from its peak, suggesting it may represent better value currently [8] - Costco is considered a strong company with a solid business model but is not viewed as a bargain at present, while Realty Income appears fairly priced and could provide a reliable income stream for dividend investors [9]

Company Overview - Costco has generated a total return of 22,000% over the past 40 years, translating a $10,000 investment in April 1985 to $2.2 billion today, with an annualized gain of 14.4% [1] - The company operates 897 locations globally, with a focus on providing quality merchandise at affordable prices [3] Growth and Expansion - Costco's store count has grown from 221 in 1994, with plans for nearly half of new store openings to occur outside the U.S. [4] - Same-store sales increased by 6.8% in Q2, marking at least 13 consecutive years of growth in this key metric [5] - Diluted earnings per share have grown at a compound annual rate of 11.6% over the past 20 years, with expectations of 11.1% growth from fiscal 2024 to fiscal 2027 [6] Competitive Position - Costco is the third-largest retailer globally, generating $62.5 billion in net sales during the 12-week period ending Feb. 16 [8] - The company benefits from significant buying leverage due to its scale and a limited number of stock-keeping units, which allows for cost savings passed on to consumers [9] - Membership households increased by 6.8% in the latest fiscal quarter, with a high renewal rate of 90.5% [9] Investment Considerations - Current share prices are down 9% from their February peak, but the price-to-earnings ratio stands at 57, which is near its highest level ever [10] - The high valuation may hinder potential returns, suggesting that investors should be cautious about purchasing the stock at this time [11]

Company Overview - Costco and Home Depot are two of the largest retailers globally, with a combined market cap of $770 billion as of April 21 [1] - Costco focuses on general merchandise, while Home Depot specializes in DIY and professional home improvement products [1] Costco Performance - In fiscal Q2 2025, Costco reported a 6.8% year-over-year increase in same-store sales, driven by increased foot traffic and strong growth in categories like home furnishings, gold and jewelry, and appliances [3] - Costco's membership model has resulted in a loyal customer base, with 78.4 million households contributing to $1.2 billion in membership fee income [4] - The company has a consistent profit generation capability, offering regular dividends and special one-time payouts, the latest being $15 per share in January 2024 [5] Home Depot Performance - Home Depot generated $159.5 billion in revenue in fiscal 2024, significantly outperforming competitors like Lowe's [6] - The company is facing challenges, with same-store sales expected to rise only 1% this fiscal year after a decline of 1.8% in fiscal 2024 [7] - Home Depot's long-term prospects are supported by the aging U.S. housing stock and significant untapped home equity for upgrades [8] Comparative Analysis - Costco is viewed as a more resilient business compared to Home Depot, as its demand is less sensitive to macroeconomic conditions, while Home Depot's performance is closely tied to the housing market [9] - Despite Costco's perceived strength, Home Depot is considered a better investment based on valuation, with a price-to-earnings ratio of 23.2 compared to Costco's 55.9 [10] - Some investors may prioritize owning high-quality businesses regardless of valuation, suggesting a dollar-cost averaging strategy for purchasing shares [11]

Group 1 - Costco is expected to perform relatively well due to its strong relationship with customers [1]

Core Viewpoint - Costco Wholesale announced a dividend increase, which positively impacted its stock price, rising nearly 3% compared to a minimal increase in the S&P 500 [1] Dividend Announcement - Costco declared a quarterly dividend of $1.30 per share, a 12% increase from the previous $1.16, to be paid on May 16 to shareholders of record as of May 2 [2] - At the latest closing share price, this new dividend amount yields 0.5% [2] Comparison with S&P 500 - The new dividend yield is below the S&P 500 average of 1.4%, indicating that Costco is not primarily viewed as an income stock [3] Historical Dividend Growth - Costco has a history of consistent annual dividend increases for over 20 years, with the last increase being a 14% rise to $1.16 per share [4] Investor Sentiment - While the dividend is not the main driver of Costco's stock performance, it adds value for investors, and the company is expected to continue delivering double-digit dividend hikes in the future [5]

Core Viewpoint - Costco Wholesale Corporation announced a 12.1% increase in its quarterly dividend, enhancing its attractiveness to investors seeking steady income and growth [1][2] Financial Performance - The dividend increased from $1.16 to $1.30 per share, reflecting strong cash flow and disciplined financial management [2] - Costco stock closed at $967.75, 10.2% below its 52-week high of $1,078.23, with a 36.1% rise over the past year, outperforming the industry growth of 18.2% [5] - The stock is trading at a forward 12-month price-to-earnings ratio of 50.72, significantly higher than the industry average of 31.59 and the S&P 500's 19.85 [9] Membership and Sales Growth - Costco ended the second quarter of fiscal 2025 with 78.4 million paid household members, a 6.8% increase year-over-year, with executive memberships growing by 9.1% [11] - Comparable sales rose 6.4% for the five weeks ended April 6, 2025, with e-commerce sales increasing by 16.2% [14] Strategic Initiatives - Costco plans to open 28 new warehouses in fiscal 2025, including 25 new locations and three relocations, to expand its market reach [15] - The company has allocated $1.14 billion to capital expenditures in the second quarter and outlined a $5 billion expenditure plan for fiscal 2025 [16] Earnings Outlook - The Zacks Consensus Estimate for earnings per share has seen upward revisions, indicating year-over-year growth rates of 11.4% for the current fiscal year and 10% for the next [17] Investment Considerations - Despite the stock's high valuation, Costco's strong business model and loyal membership base make it an attractive long-term investment, although new buyers may want to wait for a better entry point [18]

Group 1 - Costco Wholesale Corporation announced a quarterly cash dividend increase from $1.16 to $1.30 per share, amounting to an annualized dividend of $5.20, payable on May 16, 2025 [1] - The company operates a total of 904 warehouses globally, with 623 located in the United States and Puerto Rico, and additional locations in Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden [2] Group 2 - Costco also runs e-commerce sites in multiple countries including the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia [2]

Core Viewpoint - The potential for a recession is increasing due to tariff policies, which could lead to a worldwide economic slowdown as prices rise significantly [1][2]. Group 1: Costco Wholesale - Costco operates in the consumer staples sector, focusing on essential products, which typically perform better during recessions [3]. - The company's revenue forecast for the next 12 months is $1,024.03, indicating a 6.29% upside from the current price of $963.41 [4]. - Food accounts for approximately 54% of Costco's total revenue, with gasoline contributing an additional 12% [4]. - Costco's Kirkland Signature brand is priced about 20% lower than national brands, providing a competitive edge during economic downturns [5]. - Despite exposure to non-food items (26% of revenue), Costco's strong membership renewal rate of 91% during the pandemic helps mitigate risks [6]. Group 2: Dollar General - Dollar General is also positioned in the consumer staples sector, focusing on low-cost essentials, which is advantageous in recessionary periods [7]. - The 12-month stock price forecast for Dollar General is $94.75, reflecting a 6.33% upside from the current price of $89.11 [8]. - Consumables make up 82% of Dollar General's total revenue, including essential items like food and personal hygiene products [9]. - The company's strategy of maintaining low price points makes it a favorable option for consumers during tough economic times [10]. Group 3: TJX Companies - TJX operates in the consumer discretionary sector but employs an off-price strategy, selling brand-name goods at significant discounts [11]. - The 12-month stock price forecast for TJX is $135.76, indicating a 5.88% upside from the current price of $128.22 [12]. - TJX has historically outperformed during recessions, with shares rising 30% in the 2001 recession while the S&P 500 fell [13]. - Analysts have identified TJX as a top pick for potential recession resilience, despite underperforming the S&P 500 in 2020 [14].

Group 1 - The article emphasizes the importance of long-term investing, highlighting the benefits of compounding and dividend reinvesting as key strategies for wealth creation [1] - It advocates for a balanced investment approach that combines steady accumulation of high-quality assets with high-risk, high-reward opportunities and transformative technologies [1] - The author expresses a commitment to investing in companies and industries that contribute positively to society, reflecting a values-driven investment philosophy [1] Group 2 - The article does not provide any specific stock recommendations or investment advice, maintaining a neutral stance on the suitability of investments for individual investors [2][3] - It clarifies that the author has no financial positions in the companies mentioned, ensuring transparency in the analysis presented [2]