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Should you consider NASDAQ:COST for quality investing?

By Mill Chart

Last update: Sep 14, 2023

In this article we will dive into COSTCO WHOLESALE CORP (NASDAQ:COST) as a possible candidate for quality investing. Investors should always do their own research, but we noticed COSTCO WHOLESALE CORP showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Some of the quality metrics of NASDAQ:COST highlighted

  • COSTCO WHOLESALE CORP has demonstrated significant revenue growth over the past 5 years, with a 11.96% increase. This underscores the company's ability to adapt to market dynamics and capitalize on growth opportunities.
  • COSTCO WHOLESALE CORP demonstrates impressive performance in terms of ROIC excluding cash and goodwill, with a 27.8% ratio. This highlights the company's efficient utilization of capital and its focus on maximizing returns for investors.
  • COSTCO WHOLESALE CORP demonstrates a well-balanced Debt/Free Cash Flow Ratio of 1.12, indicating effective debt management and strong cash flow generation. This ratio suggests the company has a sustainable financial position and the capacity to allocate capital efficiently.
  • With a robust Profit Quality (5-year) ratio of 99.93%, COSTCO WHOLESALE CORP highlights its ability to consistently generate high-quality profits. This metric reflects the company's effective management and operational excellence in delivering reliable earnings over the long term.
  • COSTCO WHOLESALE CORP has consistently achieved strong EBIT growth over the past 5 years, with a 13.99% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
  • With EBIT 5-year growth outpacing its Revenue 5-year growth, COSTCO WHOLESALE CORP showcases its effective cost management and enhanced operational performance. This suggests the company's ability to generate higher earnings from its revenue streams.

Zooming in on the fundamentals.

As part of its analysis, ChartMill provides a comprehensive Fundamental Rating for each stock. This rating, ranging from 0 to 10, is updated on a daily basis and is based on the evaluation of various fundamental indicators and properties.

COST gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 42 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. COST is valied quite expensively at the moment, while it does show a decent growth rate.

For an up to date full fundamental analysis you can check the fundamental report of COST

Our Caviar Cruise screen will find you more ideas suited for quality investing.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.



NASDAQ:COST (9/21/2023, 7:00:00 PM)

After market: 554.31 -0.77 (-0.14%)


-8.75 (-1.55%)


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