COSTCO WHOLESALE CORP (COST)
US22160K1051 - Common Stock
Overall COST gets a fundamental rating of 6 out of 10. We evaluated COST against 41 industry peers in the Consumer Staples Distribution & Retail industry. COST has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. While showing a medium growth rate, COST is valued expensive at the moment. With these ratings, COST could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
COST had positive earnings in the past year.
In the past year COST had a positive cash flow from operations.
Each year in the past 5 years COST has been profitable.
COST had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.55%, COST belongs to the top of the industry, outperforming 97.56% of the companies in the same industry.
With an excellent Return On Equity value of 31.19%, COST belongs to the best of the industry, outperforming 90.24% of the companies in the same industry.
COST has a better Return On Invested Capital (20.23%) than 95.12% of its industry peers.
The Average Return On Invested Capital over the past 3 years for COST is significantly above the industry average of 9.18%.
The 3 year average ROIC (18.60%) for COST is below the current ROIC(20.23%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.55% | ||
| ROE | 31.19% | ||
| ROIC | 20.23% |
ROA(3y)9.59%
ROA(5y)8.89%
ROE(3y)28.2%
ROE(5y)27%
ROIC(3y)18.6%
ROIC(5y)17.81%
1.3 Margins
With an excellent Profit Margin value of 2.90%, COST belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
In the last couple of years the Profit Margin of COST has grown nicely.
With a decent Operating Margin value of 3.65%, COST is doing good in the industry, outperforming 60.98% of the companies in the same industry.
COST's Operating Margin has improved in the last couple of years.
COST's Gross Margin of 12.61% is on the low side compared to the rest of the industry. COST is outperformed by 85.37% of its industry peers.
COST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.65% | ||
| PM (TTM) | 2.9% | ||
| GM | 12.61% |
OM growth 3Y-0.72%
OM growth 5Y3.3%
PM growth 3Y4.25%
PM growth 5Y3.86%
GM growth 3Y-0.71%
GM growth 5Y-0.57%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), COST is creating value.
COST has about the same amout of shares outstanding than it did 1 year ago.
COST has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, COST has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 9.75 indicates that COST is not in any danger for bankruptcy at the moment.
COST has a Altman-Z score of 9.75. This is amongst the best in the industry. COST outperforms 97.56% of its industry peers.
The Debt to FCF ratio of COST is 0.89, which is an excellent value as it means it would take COST, only 0.89 years of fcf income to pay off all of its debts.
COST has a Debt to FCF ratio of 0.89. This is amongst the best in the industry. COST outperforms 87.80% of its industry peers.
COST has a Debt/Equity ratio of 0.25. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of COST (0.25) is better than 70.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 0.89 | ||
| Altman-Z | 9.75 |
ROIC/WACC2.28
WACC8.89%
2.3 Liquidity
COST has a Current Ratio of 0.97. This is a bad value and indicates that COST is not financially healthy enough and could expect problems in meeting its short term obligations.
COST has a Current ratio of 0.97. This is comparable to the rest of the industry: COST outperforms 41.46% of its industry peers.
A Quick Ratio of 0.44 indicates that COST may have some problems paying its short term obligations.
COST's Quick ratio of 0.44 is on the low side compared to the rest of the industry. COST is outperformed by 60.98% of its industry peers.
The current and quick ratio evaluation for COST is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
COST shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.77%, which is quite good.
The Earnings Per Share has been growing by 15.11% on average over the past years. This is quite good.
COST shows a small growth in Revenue. In the last year, the Revenue has grown by 5.02%.
Measured over the past years, COST shows a quite strong growth in Revenue. The Revenue has been growing by 10.75% on average per year.
EPS 1Y (TTM)16.77%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%8.85%
Revenue 1Y (TTM)5.02%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%0.96%
3.2 Future
Based on estimates for the next years, COST will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.46% on average per year.
COST is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.58% yearly.
EPS Next Y9.9%
EPS Next 2Y10.05%
EPS Next 3Y10.58%
EPS Next 5Y9.46%
Revenue Next Year7.02%
Revenue Next 2Y6.94%
Revenue Next 3Y6.76%
Revenue Next 5Y7.58%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 57.49, which means the current valuation is very expensive for COST.
68.29% of the companies in the same industry are cheaper than COST, based on the Price/Earnings ratio.
COST is valuated expensively when we compare the Price/Earnings ratio to 28.65, which is the current average of the S&P500 Index.
COST is valuated quite expensively with a Price/Forward Earnings ratio of 52.31.
Based on the Price/Forward Earnings ratio, COST is valued a bit more expensive than the industry average as 63.41% of the companies are valued more cheaply.
COST's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 23.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.49 | ||
| Fwd PE | 52.31 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, COST is valued a bit more expensive than the industry average as 73.17% of the companies are valued more cheaply.
63.41% of the companies in the same industry are cheaper than COST, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 63.67 | ||
| EV/EBITDA | 35.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates COST does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of COST may justify a higher PE ratio.
PEG (NY)5.81
PEG (5Y)3.81
EPS Next 2Y10.05%
EPS Next 3Y10.58%
5. Dividend
5.1 Amount
COST has a yearly dividend return of 0.50%, which is pretty low.
Compared to an average industry Dividend Yield of 2.55, COST has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.23, COST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
5.2 History
The dividend of COST is nicely growing with an annual growth rate of 53.89%!
COST has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of COST decreased in the last 3 years.
Dividend Growth(5Y)53.89%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
122.72% of the earnings are spent on dividend by COST. This is not a sustainable payout ratio.
The dividend of COST is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP122.72%
EPS Next 2Y10.05%
EPS Next 3Y10.58%
COSTCO WHOLESALE CORP
NASDAQ:COST (11/21/2024, 1:54:03 PM)
952.527
+24.45 (+2.63%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap422.04B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.49 | ||
| Fwd PE | 52.31 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)5.81
PEG (5Y)3.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.55% | ||
| ROE | 31.19% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 3.65% | ||
| PM (TTM) | 2.9% | ||
| GM | 12.61% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover3.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)16.77%
EPS 3Y14.32%
EPS 5Y
EPS Q2Q%
EPS Next Y9.9%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.02%
Revenue growth 3Y9.1%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y