983.25 USD
+7.08 (+0.73%)
982 USD
-1.25 (-0.13%)
COST gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 38 industry peers in the Consumer Staples Distribution & Retail industry. COST has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, COST is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year COST was profitable.
- COST had a positive operating cash flow in the past year.
- In the past 5 years COST has always been profitable.
- In the past 5 years COST always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of COST (10.03%) is better than 84.21% of its industry peers.
- COST has a better Return On Equity (27.40%) than 84.21% of its industry peers.
- COST has a better Return On Invested Capital (19.55%) than 97.37% of its industry peers.
- COST had an Average Return On Invested Capital over the past 3 years of 19.04%. This is significantly below the industry average of 28.30%.
- The last Return On Invested Capital (19.55%) for COST is above the 3 year average (19.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 27.4% | ||
| ROIC | 19.55% |
ROA(3y)10.06%
ROA(5y)9.55%
ROE(3y)28.02%
ROE(5y)28.18%
ROIC(3y)19.04%
ROIC(5y)18.81%
1.3 Margins
- With a decent Profit Margin value of 2.96%, COST is doing good in the industry, outperforming 73.68% of the companies in the same industry.
- In the last couple of years the Profit Margin of COST has grown nicely.
- COST has a Operating Margin of 3.80%. This is in the better half of the industry: COST outperforms 65.79% of its industry peers.
- COST's Operating Margin has been stable in the last couple of years.
- Looking at the Gross Margin, with a value of 12.88%, COST is doing worse than 81.58% of the companies in the same industry.
- COST's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.8% | ||
| PM (TTM) | 2.96% | ||
| GM | 12.88% |
OM growth 3Y2.67%
OM growth 5Y0.6%
PM growth 3Y4.55%
PM growth 5Y4.16%
GM growth 3Y1.87%
GM growth 5Y-0.47%
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.
- The number of shares outstanding for COST has been increased compared to 5 years ago.
- COST has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 9.18 indicates that COST is not in any danger for bankruptcy at the moment.
- COST's Altman-Z score of 9.18 is amongst the best of the industry. COST outperforms 94.74% of its industry peers.
- COST has a debt to FCF ratio of 0.64. This is a very positive value and a sign of high solvency as it would only need 0.64 years to pay back of all of its debts.
- COST has a better Debt to FCF ratio (0.64) than 92.11% of its industry peers.
- A Debt/Equity ratio of 0.19 indicates that COST is not too dependend on debt financing.
- The Debt to Equity ratio of COST (0.19) is better than 71.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 0.64 | ||
| Altman-Z | 9.18 |
ROIC/WACC2.23
WACC8.75%
2.3 Liquidity
- COST has a Current Ratio of 1.04. This is a normal value and indicates that COST is financially healthy and should not expect problems in meeting its short term obligations.
- COST has a worse Current ratio (1.04) than 63.16% of its industry peers.
- COST has a Quick Ratio of 1.04. This is a bad value and indicates that COST is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.53, COST perfoms like the industry average, outperforming 44.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
- COST shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.63%, which is quite good.
- The Earnings Per Share has been growing by 15.76% on average over the past years. This is quite good.
- COST shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.34%.
- Measured over the past years, COST shows a quite strong growth in Revenue. The Revenue has been growing by 10.54% on average per year.
EPS 1Y (TTM)9.63%
EPS 3Y11.13%
EPS 5Y15.76%
EPS Q2Q%11.39%
Revenue 1Y (TTM)8.34%
Revenue growth 3Y6.64%
Revenue growth 5Y10.54%
Sales Q2Q%8.3%
3.2 Future
- COST is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.37% yearly.
- COST is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.09% yearly.
EPS Next Y14.08%
EPS Next 2Y11.77%
EPS Next 3Y11.31%
EPS Next 5Y9.37%
Revenue Next Year8.04%
Revenue Next 2Y7.8%
Revenue Next 3Y7.56%
Revenue Next 5Y7.09%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 52.66, COST can be considered very expensive at the moment.
- Based on the Price/Earnings ratio, COST is valued a bit more expensive than the industry average as 71.05% of the companies are valued more cheaply.
- COST's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.21.
- With a Price/Forward Earnings ratio of 43.22, COST can be considered very expensive at the moment.
- Based on the Price/Forward Earnings ratio, COST is valued a bit more expensive than 60.53% of the companies in the same industry.
- COST is valuated expensively when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.66 | ||
| Fwd PE | 43.22 |
4.2 Price Multiples
- COST's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. COST is more expensive than 73.68% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 63.16% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 48.4 | ||
| EV/EBITDA | 32.02 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- COST has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.74
PEG (5Y)3.34
EPS Next 2Y11.77%
EPS Next 3Y11.31%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.53%, COST is not a good candidate for dividend investing.
- COST's Dividend Yield is a higher than the industry average which is at 0.73.
- Compared to an average S&P500 Dividend Yield of 1.81, COST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.53% |
5.2 History
- On average, the dividend of COST grows each year by 7.97%, which is quite nice.
- COST has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.97%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- COST pays out 27.04% of its income as dividend. This is a sustainable payout ratio.
- COST's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP27.04%
EPS Next 2Y11.77%
EPS Next 3Y11.31%
COSTCO WHOLESALE CORP / COST FAQ
What is the fundamental rating for COST stock?
ChartMill assigns a fundamental rating of 5 / 10 to COST.
What is the valuation status of COSTCO WHOLESALE CORP (COST) stock?
ChartMill assigns a valuation rating of 1 / 10 to COSTCO WHOLESALE CORP (COST). This can be considered as Overvalued.
How profitable is COSTCO WHOLESALE CORP (COST) stock?
COSTCO WHOLESALE CORP (COST) has a profitability rating of 7 / 10.
Can you provide the expected EPS growth for COST stock?
The Earnings per Share (EPS) of COSTCO WHOLESALE CORP (COST) is expected to grow by 14.08% in the next year.
Is the dividend of COSTCO WHOLESALE CORP sustainable?
The dividend rating of COSTCO WHOLESALE CORP (COST) is 5 / 10 and the dividend payout ratio is 27.04%.