COSTCO WHOLESALE CORP (COST) Stock Fundamental Analysis
NASDAQ:COST - US22160K1051 - Common Stock
958.54 USD
-11.14 (-1.15%)
958.177 USD
-0.36 (-0.04%)
Taking everything into account, COST scores 6 out of 10 in our fundamental rating. COST was compared to 40 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. This makes COST very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year COST was profitable.
COST had a positive operating cash flow in the past year.
Each year in the past 5 years COST has been profitable.
In the past 5 years COST always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.39%, COST belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
With an excellent Return On Equity value of 28.91%, COST belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
COST's Return On Invested Capital of 19.92% 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 8.22%.
The last Return On Invested Capital (19.92%) for COST is above the 3 year average (18.60%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.39% | ||
| ROE | 28.91% | ||
| ROIC | 19.92% |
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
Looking at the Profit Margin, with a value of 2.92%, COST is in the better half of the industry, outperforming 77.50% of the companies in the same industry.
COST's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 3.75%, COST is doing good in the industry, outperforming 70.00% of the companies in the same industry.
COST's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 12.78%, COST is doing worse than 82.50% 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 | 3.75% | ||
| PM (TTM) | 2.92% | ||
| GM | 12.78% |
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.
The number of shares outstanding for COST remains at a similar level compared to 1 year ago.
The number of shares outstanding for COST has been increased compared to 5 years ago.
Compared to 1 year ago, COST has an improved debt to assets ratio.
2.2 Solvency
COST has an Altman-Z score of 9.67. This indicates that COST is financially healthy and has little risk of bankruptcy at the moment.
COST has a better Altman-Z score (9.67) than 97.50% of its industry peers.
COST has a debt to FCF ratio of 0.78. This is a very positive value and a sign of high solvency as it would only need 0.78 years to pay back of all of its debts.
The Debt to FCF ratio of COST (0.78) is better than 87.50% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that COST is not too dependend on debt financing.
COST has a Debt to Equity ratio of 0.21. This is in the better half of the industry: COST outperforms 67.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 0.78 | ||
| Altman-Z | 9.67 |
ROIC/WACC2.27
WACC8.77%
2.3 Liquidity
COST has a Current Ratio of 1.02. This is a normal value and indicates that COST is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.02, COST is not doing good in the industry: 65.00% of the companies in the same industry are doing better.
A Quick Ratio of 0.52 indicates that COST may have some problems paying its short term obligations.
COST has a Quick ratio (0.52) which is in line with 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 | 1.02 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.23% over the past year.
COST shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.11% yearly.
COST shows a small growth in Revenue. In the last year, the Revenue has grown by 5.94%.
The Revenue has been growing by 10.75% on average over the past years. This is quite good.
EPS 1Y (TTM)9.23%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%13.23%
Revenue 1Y (TTM)5.94%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%8.02%
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 9.40% on average per year.
COST is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.62% yearly.
EPS Next Y11.86%
EPS Next 2Y11.17%
EPS Next 3Y10.86%
EPS Next 5Y9.4%
Revenue Next Year7.7%
Revenue Next 2Y7.6%
Revenue Next 3Y7.48%
Revenue Next 5Y6.62%
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
COST is valuated quite expensively with a Price/Earnings ratio of 54.37.
COST's Price/Earnings ratio is a bit more expensive when compared to the industry. COST is more expensive than 75.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.24, COST is valued quite expensively.
Based on the Price/Forward Earnings ratio of 46.80, the valuation of COST can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 62.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.82, COST is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.37 | ||
| Fwd PE | 46.8 |
4.2 Price Multiples
COST's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. COST is more expensive than 80.00% 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 75.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.1 | ||
| EV/EBITDA | 33.35 |
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 an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.58
PEG (5Y)3.6
EPS Next 2Y11.17%
EPS Next 3Y10.86%
5. Dividend
5.1 Amount
COST has a yearly dividend return of 0.54%, which is pretty low.
Compared to an average industry Dividend Yield of 1.93, COST pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.54, COST pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
5.2 History
On average, the dividend of COST grows each year by 53.89%, which is quite nice.
COST has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)53.89%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
COST pays out 19.69% of its income as dividend. This is a sustainable payout ratio.
The dividend of COST is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.69%
EPS Next 2Y11.17%
EPS Next 3Y10.86%
958.54
-11.14 (-1.15%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners71.83%
Inst Owner Change-1.53%
Ins Owners0.09%
Ins Owner Change-1.32%
Market Cap425.09B
Analysts78.14
Price Target1089.82 (13.7%)
Short Float %1.26%
Short Ratio2.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.54% |
Yearly Dividend20.41
Dividend Growth(5Y)53.89%
DP19.69%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.51%
Min EPS beat(2)-4.04%
Max EPS beat(2)-0.98%
EPS beat(4)2
Avg EPS beat(4)0.45%
Min EPS beat(4)-4.04%
Max EPS beat(4)4.5%
EPS beat(8)5
Avg EPS beat(8)1.26%
EPS beat(12)6
Avg EPS beat(12)-0.44%
EPS beat(16)10
Avg EPS beat(16)1.2%
Revenue beat(2)0
Avg Revenue beat(2)-1.49%
Min Revenue beat(2)-1.94%
Max Revenue beat(2)-1.05%
Revenue beat(4)0
Avg Revenue beat(4)-1.86%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)-1.05%
Revenue beat(8)0
Avg Revenue beat(8)-1.78%
Revenue beat(12)0
Avg Revenue beat(12)-2.05%
Revenue beat(16)1
Avg Revenue beat(16)-1.63%
PT rev (1m)-0.05%
PT rev (3m)-0.05%
EPS NQ rev (1m)-0.12%
EPS NQ rev (3m)-0.47%
EPS NY rev (1m)-0.05%
EPS NY rev (3m)0.4%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.65%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.37 | ||
| Fwd PE | 46.8 | ||
| P/S | 1.58 | ||
| P/FCF | 58.1 | ||
| P/OCF | 34.21 | ||
| P/B | 15.67 | ||
| P/tB | 15.67 | ||
| EV/EBITDA | 33.35 |
EPS(TTM)17.63
EY1.84%
EPS(NY)20.48
Fwd EY2.14%
FCF(TTM)16.5
FCFY1.72%
OCF(TTM)28.02
OCFY2.92%
SpS606.06
BVpS61.16
TBVpS61.16
PEG (NY)4.58
PEG (5Y)3.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.39% | ||
| ROE | 28.91% | ||
| ROCE | 26.6% | ||
| ROIC | 19.92% | ||
| ROICexc | 32.76% | ||
| ROICexgc | 32.76% | ||
| OM | 3.75% | ||
| PM (TTM) | 2.92% | ||
| GM | 12.78% | ||
| FCFM | 2.72% |
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-Score7
Asset Turnover3.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 0.78 | ||
| Debt/EBITDA | 0.46 | ||
| Cap/Depr | 216.67% | ||
| Cap/Sales | 1.9% | ||
| Interest Coverage | 84.03 | ||
| Cash Conversion | 99.87% | ||
| Profit Quality | 93.29% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 9.67 |
F-Score7
WACC8.77%
ROIC/WACC2.27
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)9.23%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%13.23%
EPS Next Y11.86%
EPS Next 2Y11.17%
EPS Next 3Y10.86%
EPS Next 5Y9.4%
Revenue 1Y (TTM)5.94%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%8.02%
Revenue Next Year7.7%
Revenue Next 2Y7.6%
Revenue Next 3Y7.48%
Revenue Next 5Y6.62%
EBIT growth 1Y11.75%
EBIT growth 3Y8.31%
EBIT growth 5Y14.41%
EBIT Next Year40.12%
EBIT Next 3Y19.9%
EBIT Next 5Y14.7%
FCF growth 1Y25.66%
FCF growth 3Y7.27%
FCF growth 5Y14.57%
OCF growth 1Y26.17%
OCF growth 3Y8.17%
OCF growth 5Y12.27%