854.5 USD
-7.84 (-0.91%)
854.57 USD
+0.07 (+0.01%)
We assign a fundamental rating of 5 out of 10 to COST. COST was compared to 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. COST is valied quite expensively at the moment, while it does show a decent growth rate.
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.
In the past 5 years COST has always been profitable.
Each year in the past 5 years COST had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.03%, COST belongs to the top of the industry, outperforming 84.21% of the companies in the same industry.
COST has a Return On Equity of 27.40%. This is amongst the best in the industry. COST outperforms 84.21% of its industry peers.
The Return On Invested Capital of COST (19.55%) is better 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 28.32%.
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
COST has a Profit Margin of 2.96%. This is in the better half of the industry: COST outperforms 73.68% of its industry peers.
COST's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 3.80%, COST is doing good in the industry, outperforming 65.79% of the companies in the same industry.
COST's Operating Margin has been stable in the last couple of years.
COST has a Gross Margin of 12.88%. This is amonst the worse of the industry: COST underperforms 81.58% 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 | 3.8% | ||
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
Compared to 1 year ago, COST has an improved debt to assets ratio.
2.2 Solvency
COST has an Altman-Z score of 8.61. This indicates that COST is financially healthy and has little risk of bankruptcy at the moment.
COST's Altman-Z score of 8.61 is amongst the best of the industry. COST outperforms 89.47% 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's Debt to FCF ratio of 0.64 is amongst the best of the industry. COST outperforms 89.47% of its industry peers.
COST has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
COST has a better Debt to Equity ratio (0.19) than 73.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 0.64 | ||
| Altman-Z | 8.61 |
ROIC/WACC2.26
WACC8.67%
2.3 Liquidity
A Current Ratio of 1.04 indicates that COST should not have too much problems paying its short term obligations.
COST's Current ratio of 1.04 is on the low side compared to the rest of the industry. COST is outperformed by 65.79% of its industry peers.
A Quick Ratio of 0.53 indicates that COST may have some problems paying its short term obligations.
COST's Quick ratio of 0.53 is in line compared to the rest of the industry. COST outperforms 44.74% of its industry peers.
| 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.
COST shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.76% yearly.
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
Based on estimates for the next years, COST will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.87% on average per year.
Based on estimates for the next years, COST will show a small growth in Revenue. The Revenue will grow by 6.26% on average per year.
EPS Next Y14.1%
EPS Next 2Y11.83%
EPS Next 3Y11.43%
EPS Next 5Y8.87%
Revenue Next Year8.07%
Revenue Next 2Y7.79%
Revenue Next 3Y7.59%
Revenue Next 5Y6.26%
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
A Price/Earnings ratio of 45.77 indicates a quite expensive valuation of COST.
COST's Price/Earnings ratio is a bit more expensive when compared to the industry. COST is more expensive than 71.05% of the companies in the same industry.
COST's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.60.
A Price/Forward Earnings ratio of 37.52 indicates a quite expensive valuation of COST.
Based on the Price/Forward Earnings ratio, COST is valued a bit more expensive than 60.53% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.23, COST is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.77 | ||
| Fwd PE | 37.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, COST is valued a bit more expensive than 73.68% of the companies in the same industry.
63.16% of the companies in the same industry are cheaper than COST, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.06 | ||
| EV/EBITDA | 28.17 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates COST does not grow enough to justify the current Price/Earnings ratio.
COST has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.25
PEG (5Y)2.9
EPS Next 2Y11.83%
EPS Next 3Y11.43%
5. Dividend
5.1 Amount
With a yearly dividend of 0.60%, COST is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 0.78, COST pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.60, COST pays less dividend than the S&P500 average, which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
5.2 History
The dividend of COST is nicely growing with an annual growth rate of 7.97%!
COST has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)7.97%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
27.04% of the earnings are spent on dividend by COST. This is a low number and sustainable payout ratio.
The dividend of COST is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP27.04%
EPS Next 2Y11.83%
EPS Next 3Y11.43%
854.5
-7.84 (-0.91%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners71.7%
Inst Owner Change-2.18%
Ins Owners0.09%
Ins Owner Change0.8%
Market Cap378.70B
Revenue(TTM)280.39B
Net Income(TTM)8.30B
Analysts77.73
Price Target1048.64 (22.72%)
Short Float %1.52%
Short Ratio2.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.6% |
Yearly Dividend4.93
Dividend Growth(5Y)7.97%
DP27.04%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.23%
Min EPS beat(2)-0.82%
Max EPS beat(2)3.28%
EPS beat(4)1
Avg EPS beat(4)-0.64%
Min EPS beat(4)-4.04%
Max EPS beat(4)3.28%
EPS beat(8)5
Avg EPS beat(8)1.31%
EPS beat(12)7
Avg EPS beat(12)0.06%
EPS beat(16)9
Avg EPS beat(16)0.25%
Revenue beat(2)0
Avg Revenue beat(2)-1.78%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)-1.71%
Revenue beat(4)0
Avg Revenue beat(4)-1.64%
Min Revenue beat(4)-1.94%
Max Revenue beat(4)-1.05%
Revenue beat(8)0
Avg Revenue beat(8)-1.92%
Revenue beat(12)0
Avg Revenue beat(12)-1.99%
Revenue beat(16)0
Avg Revenue beat(16)-1.84%
PT rev (1m)-2.56%
PT rev (3m)-3.78%
EPS NQ rev (1m)0.35%
EPS NQ rev (3m)0.61%
EPS NY rev (1m)1.42%
EPS NY rev (3m)1.52%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.77 | ||
| Fwd PE | 37.52 | ||
| P/S | 1.35 | ||
| P/FCF | 42.06 | ||
| P/OCF | 25.65 | ||
| P/B | 12.5 | ||
| P/tB | 12.5 | ||
| EV/EBITDA | 28.17 |
EPS(TTM)18.67
EY2.18%
EPS(NY)22.77
Fwd EY2.66%
FCF(TTM)20.31
FCFY2.38%
OCF(TTM)33.31
OCFY3.9%
SpS632.68
BVpS68.38
TBVpS68.38
PEG (NY)3.25
PEG (5Y)2.9
Graham Number169.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.03% | ||
| ROE | 27.4% | ||
| ROCE | 25.99% | ||
| ROIC | 19.55% | ||
| ROICexc | 33.67% | ||
| ROICexgc | 33.67% | ||
| OM | 3.8% | ||
| PM (TTM) | 2.96% | ||
| GM | 12.88% | ||
| FCFM | 3.21% |
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)32.07%
ROICexgc(5y)31.88%
ROCE(3y)25.3%
ROCE(5y)25%
ROICexgc growth 3Y3.66%
ROICexgc growth 5Y2.96%
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 Turnover3.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 0.64 | ||
| Debt/EBITDA | 0.43 | ||
| Cap/Depr | 232.73% | ||
| Cap/Sales | 2.05% | ||
| Interest Coverage | 101.43 | ||
| Cash Conversion | 112.48% | ||
| Profit Quality | 108.44% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.53 | ||
| Altman-Z | 8.61 |
F-Score7
WACC8.67%
ROIC/WACC2.26
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)9.63%
EPS 3Y11.13%
EPS 5Y15.76%
EPS Q2Q%11.39%
EPS Next Y14.1%
EPS Next 2Y11.83%
EPS Next 3Y11.43%
EPS Next 5Y8.87%
Revenue 1Y (TTM)8.34%
Revenue growth 3Y6.64%
Revenue growth 5Y10.54%
Sales Q2Q%8.3%
Revenue Next Year8.07%
Revenue Next 2Y7.79%
Revenue Next 3Y7.59%
Revenue Next 5Y6.26%
EBIT growth 1Y12.14%
EBIT growth 3Y9.49%
EBIT growth 5Y11.2%
EBIT Next Year38.32%
EBIT Next 3Y18.66%
EBIT Next 5Y14.04%
FCF growth 1Y2.27%
FCF growth 3Y30.81%
FCF growth 5Y5.31%
OCF growth 1Y12.62%
OCF growth 3Y21.73%
OCF growth 5Y8.52%
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 14.1% 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%.