Best Stock to Buy Right Now: Costco vs. Realty Income

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]