COSTCO WHOLESALE CORP (COST)
US22160K1051 - Common Stock
Taking everything into account, COST scores 6 out of 10 in our fundamental rating. COST was compared to 43 industry peers in the Consumer Staples Distribution & Retail industry. COST scores excellent points on both the profitability and health parts. This is a solid base for a good stock. COST is valied quite expensively at the moment, while it does show a decent growth rate. 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
COST has a Return On Assets of 10.32%. This is amongst the best in the industry. COST outperforms 97.67% of its industry peers.
The Return On Equity of COST (30.98%) is better than 90.70% of its industry peers.
COST's Return On Invested Capital of 20.26% is amongst the best of the industry. COST outperforms 100.00% of its industry peers.
COST had an Average Return On Invested Capital over the past 3 years of 18.60%. This is significantly above the industry average of 8.45%.
The last Return On Invested Capital (20.26%) for COST is above the 3 year average (18.60%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.32% | ||
| ROE | 30.98% | ||
| ROIC | 20.26% |
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
COST's Profit Margin of 2.93% is amongst the best of the industry. COST outperforms 86.05% of its industry peers.
COST's Profit Margin has improved in the last couple of years.
COST has a Operating Margin of 3.67%. This is in the better half of the industry: COST outperforms 67.44% of its industry peers.
COST's Operating Margin has improved in the last couple of years.
COST has a worse Gross Margin (12.67%) than 86.05% of its industry peers.
In the last couple of years the Gross Margin of COST has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.67% | ||
| PM (TTM) | 2.93% | ||
| GM | 12.67% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so COST is creating value.
Compared to 1 year ago, COST has about the same amount of shares outstanding.
Compared to 5 years ago, COST has more shares outstanding
Compared to 1 year ago, COST has an improved debt to assets ratio.
2.2 Solvency
COST has an Altman-Z score of 9.49. This indicates that COST is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of COST (9.49) is better than 95.35% of its industry peers.
COST has a debt to FCF ratio of 1.15. This is a very positive value and a sign of high solvency as it would only need 1.15 years to pay back of all of its debts.
COST has a Debt to FCF ratio of 1.15. This is amongst the best in the industry. COST outperforms 90.70% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that COST is not too dependend on debt financing.
COST has a better Debt to Equity ratio (0.23) than 72.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.15 | ||
| Altman-Z | 9.49 |
ROIC/WACC2.23
WACC9.07%
2.3 Liquidity
COST has a Current Ratio of 0.98. 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 worse Current ratio (0.98) than 60.47% of its industry peers.
A Quick Ratio of 0.43 indicates that COST may have some problems paying its short term obligations.
COST's Quick ratio of 0.43 is in line compared to the rest of the industry. COST outperforms 41.86% 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 | 0.98 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.59% over the past year.
The Earnings Per Share has been growing by 15.11% on average over the past years. This is quite good.
The Revenue has been growing slightly by 5.35% in the past year.
COST shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.75% yearly.
EPS 1Y (TTM)14.59%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%6.7%
Revenue 1Y (TTM)5.35%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%7.53%
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 12.82% on average per year.
COST is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.21% yearly.
EPS Next Y11.52%
EPS Next 2Y10.72%
EPS Next 3Y11.05%
EPS Next 5Y12.82%
Revenue Next Year6.77%
Revenue Next 2Y6.89%
Revenue Next 3Y6.71%
Revenue Next 5Y6.21%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
A Price/Earnings ratio of 56.76 indicates a quite expensive valuation of COST.
65.12% of the companies in the same industry are cheaper than COST, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.73, COST is valued quite expensively.
With a Price/Forward Earnings ratio of 46.97, COST can be considered very expensive at the moment.
COST's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. COST is more expensive than 62.79% of the companies in the same industry.
COST is valuated expensively when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.76 | ||
| Fwd PE | 46.97 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 67.44% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as COST.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 84.47 | ||
| EV/EBITDA | 35.36 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of COST may justify a higher PE ratio.
PEG (NY)4.93
PEG (5Y)3.76
EPS Next 2Y10.72%
EPS Next 3Y11.05%
5. Dividend
5.1 Amount
COST has a yearly dividend return of 0.49%, which is pretty low.
Compared to an average industry Dividend Yield of 2.43, COST has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, COST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
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
114.19% of the earnings are spent on dividend by COST. This is not a sustainable payout ratio.
COST's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP114.19%
EPS Next 2Y10.72%
EPS Next 3Y11.05%
COSTCO WHOLESALE CORP
NASDAQ:COST (12/20/2024, 8:03:40 PM)
After market: 954.07 0 (0%)954.07
-0.73 (-0.08%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners71.85%
Inst Owner Change0.72%
Ins Owners0.17%
Ins Owner Change1.66%
Market Cap423.55B
Analysts78.67
Price Target962.76 (0.91%)
Short Float %1.49%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.49% |
Dividend Growth(5Y)53.89%
DP114.19%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.56%
Min EPS beat(2)-1.18%
Max EPS beat(2)2.31%
EPS beat(4)3
Avg EPS beat(4)1.84%
Min EPS beat(4)-1.18%
Max EPS beat(4)6.12%
EPS beat(8)5
Avg EPS beat(8)-0.31%
EPS beat(12)7
Avg EPS beat(12)0.07%
EPS beat(16)10
Avg EPS beat(16)1.23%
Revenue beat(2)0
Avg Revenue beat(2)-2.43%
Min Revenue beat(2)-2.61%
Max Revenue beat(2)-2.25%
Revenue beat(4)0
Avg Revenue beat(4)-2.3%
Min Revenue beat(4)-3.14%
Max Revenue beat(4)-1.21%
Revenue beat(8)0
Avg Revenue beat(8)-2.22%
Revenue beat(12)0
Avg Revenue beat(12)-1.95%
Revenue beat(16)3
Avg Revenue beat(16)-1.35%
PT rev (1m)1%
PT rev (3m)6.56%
EPS NQ rev (1m)-0.35%
EPS NQ rev (3m)-0.35%
EPS NY rev (1m)1.47%
EPS NY rev (3m)1.89%
Revenue NQ rev (1m)-0.37%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)-0.24%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.76 | ||
| Fwd PE | 46.97 | ||
| P/S | 1.64 | ||
| P/FCF | 84.47 | ||
| P/OCF | 42.58 | ||
| P/B | 17.32 | ||
| P/tB | 17.32 | ||
| EV/EBITDA | 35.36 |
EPS(TTM)16.81
EY1.76%
EPS(NY)20.31
Fwd EY2.13%
FCF(TTM)11.29
FCFY1.18%
OCF(TTM)22.41
OCFY2.35%
SpS582.97
BVpS55.08
TBVpS55.08
PEG (NY)4.93
PEG (5Y)3.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.32% | ||
| ROE | 30.98% | ||
| ROCE | 27.06% | ||
| ROIC | 20.26% | ||
| ROICexc | 30.56% | ||
| ROICexgc | 30.56% | ||
| OM | 3.67% | ||
| PM (TTM) | 2.93% | ||
| GM | 12.67% | ||
| FCFM | 1.94% |
ROA(3y)9.59%
ROA(5y)8.89%
ROE(3y)28.2%
ROE(5y)27%
ROIC(3y)18.6%
ROIC(5y)17.81%
ROICexc(3y)29.37%
ROICexc(5y)29.08%
ROICexgc(3y)30.8%
ROICexgc(5y)30.84%
ROCE(3y)24.84%
ROCE(5y)23.78%
ROICexcg growth 3Y-2.2%
ROICexcg growth 5Y2.32%
ROICexc growth 3Y-1.15%
ROICexc growth 5Y1.43%
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%
F-Score8
Asset Turnover3.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.15 | ||
| Debt/EBITDA | 0.49 | ||
| Cap/Depr | 216.03% | ||
| Cap/Sales | 1.91% | ||
| Interest Coverage | 78.49 | ||
| Cash Conversion | 84.44% | ||
| Profit Quality | 66.18% | ||
| Current Ratio | 0.98 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z | 9.49 |
F-Score8
WACC9.07%
ROIC/WACC2.23
Cap/Depr(3y)207.83%
Cap/Depr(5y)199.15%
Cap/Sales(3y)1.78%
Cap/Sales(5y)1.77%
Profit Quality(3y)85.7%
Profit Quality(5y)103.11%
High Growth Momentum
Growth
EPS 1Y (TTM)14.59%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%6.7%
EPS Next Y11.52%
EPS Next 2Y10.72%
EPS Next 3Y11.05%
EPS Next 5Y12.82%
Revenue 1Y (TTM)5.35%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%7.53%
Revenue Next Year6.77%
Revenue Next 2Y6.89%
Revenue Next 3Y6.71%
Revenue Next 5Y6.21%
EBIT growth 1Y13.78%
EBIT growth 3Y8.31%
EBIT growth 5Y14.41%
EBIT Next Year39.4%
EBIT Next 3Y19.53%
EBIT Next 5Y18.95%
FCF growth 1Y75.87%
FCF growth 3Y7.27%
FCF growth 5Y14.57%
OCF growth 1Y47.51%
OCF growth 3Y8.17%
OCF growth 5Y12.27%