COSTCO WHOLESALE CORP (COST) Stock Fundamental Analysis
USA - NASDAQ:COST - US22160K1051 - Common Stock
910.94 USD
-4.44 (-0.49%)
909.57 USD
-1.37 (-0.15%)
Overall COST gets a fundamental rating of 6 out of 10. We evaluated COST against 39 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. These ratings could make COST a good candidate 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.
COST had positive earnings in each of the past 5 years.
COST had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 10.50%, COST belongs to the best of the industry, outperforming 87.18% of the companies in the same industry.
With an excellent Return On Equity value of 27.77%, COST belongs to the best of the industry, outperforming 82.05% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 19.54%, COST belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for COST is significantly above the industry average of 8.75%.
The 3 year average ROIC (19.04%) for COST is below the current ROIC(19.54%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.5% | ||
| ROE | 27.77% | ||
| ROIC | 19.54% |
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
Looking at the Profit Margin, with a value of 2.94%, COST is in the better half of the industry, outperforming 74.36% of the companies in the same industry.
COST's Profit Margin has improved in the last couple of years.
COST's Operating Margin of 3.77% is fine compared to the rest of the industry. COST outperforms 69.23% of its industry peers.
In the last couple of years the Operating Margin of COST has remained more or less at the same level.
COST's Gross Margin of 12.84% is on the low side compared to the rest of the industry. COST is outperformed by 82.05% 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 | 3.77% | ||
| PM (TTM) | 2.94% | ||
| GM | 12.84% |
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
COST has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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
COST has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 9.52 indicates that COST is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.52, COST belongs to the top of the industry, outperforming 97.44% of the companies in the same industry.
The Debt to FCF ratio of COST is 0.73, which is an excellent value as it means it would take COST, only 0.73 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.73, COST belongs to the top of the industry, outperforming 89.74% of the companies in the same industry.
COST has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
COST has a better Debt to Equity ratio (0.20) than 64.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 0.73 | ||
| Altman-Z | 9.52 |
ROIC/WACC2.25
WACC8.69%
2.3 Liquidity
A Current Ratio of 1.03 indicates that COST should not have too much problems paying its short term obligations.
The Current ratio of COST (1.03) is worse than 69.23% of its industry peers.
A Quick Ratio of 0.55 indicates that COST may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.55, COST is in line with its industry, outperforming 48.72% of the companies in the same industry.
COST does not score too well on the current and quick ratio evaluation. However, as it has 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 | 1.03 | ||
| Quick Ratio | 0.55 |
3. Growth
3.1 Past
COST shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.90%, 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 8.17%.
The Revenue has been growing by 10.54% on average over the past years. This is quite good.
EPS 1Y (TTM)9.9%
EPS 3Y11.13%
EPS 5Y15.76%
EPS Q2Q%10.96%
Revenue 1Y (TTM)8.17%
Revenue growth 3Y6.64%
Revenue growth 5Y10.54%
Sales Q2Q%8.1%
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 6.13% yearly.
EPS Next Y12.39%
EPS Next 2Y11.34%
EPS Next 3Y11.64%
EPS Next 5Y9.4%
Revenue Next Year7.79%
Revenue Next 2Y7.62%
Revenue Next 3Y7.46%
Revenue Next 5Y6.13%
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
Based on the Price/Earnings ratio of 50.02, the valuation of COST can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of COST indicates a slightly more expensive valuation: COST is more expensive than 66.67% of the companies listed in the same industry.
COST's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.90.
The Price/Forward Earnings ratio is 44.51, which means the current valuation is very expensive for COST.
The rest of the industry has a similar Price/Forward Earnings ratio as COST.
COST is valuated expensively when we compare the Price/Forward Earnings ratio to 23.36, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.02 | ||
| Fwd PE | 44.51 |
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 71.79% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, COST is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 51.52 | ||
| EV/EBITDA | 30.84 |
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)4.04
PEG (5Y)3.17
EPS Next 2Y11.34%
EPS Next 3Y11.64%
5. Dividend
5.1 Amount
With a yearly dividend of 0.57%, COST is not a good candidate for dividend investing.
COST's Dividend Yield is a higher than the industry average which is at 1.96.
Compared to an average S&P500 Dividend Yield of 2.44, COST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
5.2 History
The dividend of COST is nicely growing with an annual growth rate of 7.97%!
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 26.95% 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.
DP26.95%
EPS Next 2Y11.34%
EPS Next 3Y11.64%
910.94
-4.44 (-0.49%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners72.07%
Inst Owner Change0%
Ins Owners0.09%
Ins Owner Change-0.07%
Market Cap403.77B
Analysts78.14
Price Target1083.63 (18.96%)
Short Float %1.48%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.57% |
Yearly Dividend4.93
Dividend Growth(5Y)7.97%
DP26.95%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.9%
Min EPS beat(2)-0.98%
Max EPS beat(2)-0.82%
EPS beat(4)1
Avg EPS beat(4)-0.33%
Min EPS beat(4)-4.04%
Max EPS beat(4)4.5%
EPS beat(8)5
Avg EPS beat(8)1.23%
EPS beat(12)6
Avg EPS beat(12)-0.42%
EPS beat(16)9
Avg EPS beat(16)0.71%
Revenue beat(2)0
Avg Revenue beat(2)-1.89%
Min Revenue beat(2)-1.94%
Max Revenue beat(2)-1.85%
Revenue beat(4)0
Avg Revenue beat(4)-1.67%
Min Revenue beat(4)-1.94%
Max Revenue beat(4)-1.05%
Revenue beat(8)0
Avg Revenue beat(8)-1.94%
Revenue beat(12)0
Avg Revenue beat(12)-2.04%
Revenue beat(16)0
Avg Revenue beat(16)-1.77%
PT rev (1m)-0.57%
PT rev (3m)-0.64%
EPS NQ rev (1m)-0.35%
EPS NQ rev (3m)0.1%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)0.1%
Revenue NQ rev (1m)0.43%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.34%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.02 | ||
| Fwd PE | 44.51 | ||
| P/S | 1.47 | ||
| P/FCF | 51.52 | ||
| P/OCF | 30.28 | ||
| P/B | 13.84 | ||
| P/tB | 13.84 | ||
| EV/EBITDA | 30.84 |
EPS(TTM)18.21
EY2%
EPS(NY)20.47
Fwd EY2.25%
FCF(TTM)17.68
FCFY1.94%
OCF(TTM)30.09
OCFY3.3%
SpS620.96
BVpS65.8
TBVpS65.8
PEG (NY)4.04
PEG (5Y)3.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.5% | ||
| ROE | 27.77% | ||
| ROCE | 25.96% | ||
| ROIC | 19.54% | ||
| ROICexc | 31.62% | ||
| ROICexgc | 31.62% | ||
| OM | 3.77% | ||
| PM (TTM) | 2.94% | ||
| GM | 12.84% | ||
| FCFM | 2.85% |
ROA(3y)10.06%
ROA(5y)9.55%
ROE(3y)28.02%
ROE(5y)28.18%
ROIC(3y)19.04%
ROIC(5y)18.81%
ROICexc(3y)30.66%
ROICexc(5y)30.26%
ROICexgc(3y)31.63%
ROICexgc(5y)31.61%
ROCE(3y)25.3%
ROCE(5y)25%
ROICexcg growth 3Y2.25%
ROICexcg growth 5Y2.12%
ROICexc growth 3Y3.91%
ROICexc growth 5Y3.68%
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%
F-Score7
Asset Turnover3.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 0.73 | ||
| Debt/EBITDA | 0.45 | ||
| Cap/Depr | 226.63% | ||
| Cap/Sales | 2% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 104.11% | ||
| Profit Quality | 96.77% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 0.55 | ||
| Altman-Z | 9.52 |
F-Score7
WACC8.69%
ROIC/WACC2.25
Cap/Depr(3y)215.11%
Cap/Depr(5y)210.31%
Cap/Sales(3y)1.88%
Cap/Sales(5y)1.84%
Profit Quality(3y)97.98%
Profit Quality(5y)92.22%
High Growth Momentum
Growth
EPS 1Y (TTM)9.9%
EPS 3Y11.13%
EPS 5Y15.76%
EPS Q2Q%10.96%
EPS Next Y12.39%
EPS Next 2Y11.34%
EPS Next 3Y11.64%
EPS Next 5Y9.4%
Revenue 1Y (TTM)8.17%
Revenue growth 3Y6.64%
Revenue growth 5Y10.54%
Sales Q2Q%8.1%
Revenue Next Year7.79%
Revenue Next 2Y7.62%
Revenue Next 3Y7.46%
Revenue Next 5Y6.13%
EBIT growth 1Y11.83%
EBIT growth 3Y9.49%
EBIT growth 5Y11.2%
EBIT Next Year35.68%
EBIT Next 3Y19.03%
EBIT Next 5Y14.39%
FCF growth 1Y18.22%
FCF growth 3Y30.81%
FCF growth 5Y5.31%
OCF growth 1Y17.6%
OCF growth 3Y21.73%
OCF growth 5Y8.52%