COSTCO WHOLESALE CORP (COST) Stock Fundamental Analysis
USA - NASDAQ:COST - US22160K1051 - Common Stock
924.16 USD
-5.69 (-0.61%)
924.16 USD
0 (0%)
COST gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals 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. COST is quite expensive at the moment. It does show a decent growth rate. This makes COST very considerable 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.
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
With an excellent Return On Assets value of 10.50%, COST belongs to the best of the industry, outperforming 89.74% of the companies in the same industry.
Looking at the Return On Equity, with a value of 27.77%, COST belongs to the top of the industry, outperforming 82.05% of the companies in the same industry.
The Return On Invested Capital of COST (19.54%) is better than 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for COST is significantly above the industry average of 8.71%.
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 76.92% of the companies in the same industry.
In the last couple of years the Profit Margin of COST has grown nicely.
COST has a better Operating Margin (3.77%) than 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 has a Gross Margin of 12.84%. This is amonst the worse of the industry: COST underperforms 82.05% of its industry peers.
COST's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), COST is creating value.
COST has about the same amout of shares outstanding than it did 1 year ago.
COST has more shares outstanding than it did 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 9.60. This indicates that COST is financially healthy and has little risk of bankruptcy at the moment.
COST has a better Altman-Z score (9.60) than 97.44% of its industry peers.
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.
COST has a better Debt to FCF ratio (0.73) than 89.74% of its industry peers.
A Debt/Equity ratio of 0.20 indicates that COST is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.20, COST is doing good in the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 0.73 | ||
| Altman-Z | 9.6 |
ROIC/WACC2.28
WACC8.57%
2.3 Liquidity
A Current Ratio of 1.03 indicates that COST should not have too much problems paying its short term obligations.
COST has a Current ratio of 1.03. This is in the lower half of the industry: COST underperforms 66.67% of its industry peers.
COST has a Quick Ratio of 1.03. This is a bad value and indicates that COST is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of COST (0.55) is comparable to the rest of the 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.
COST shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.76% yearly.
Looking at the last year, COST shows a quite strong growth in Revenue. The Revenue has grown by 8.17% in the last year.
COST shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.54% yearly.
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.
Based on estimates for the next years, COST will show a small growth in Revenue. The Revenue will grow by 6.13% on average per year.
EPS Next Y12.49%
EPS Next 2Y11.39%
EPS Next 3Y11.39%
EPS Next 5Y9.4%
Revenue Next Year7.9%
Revenue Next 2Y7.74%
Revenue Next 3Y7.38%
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
With a Price/Earnings ratio of 50.75, COST can be considered very expensive at the moment.
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.
When comparing the Price/Earnings ratio of COST to the average of the S&P500 Index (26.83), we can say COST is valued expensively.
A Price/Forward Earnings ratio of 45.11 indicates a quite expensive valuation of COST.
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 61.54% of the companies listed in the same industry.
COST's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.75 | ||
| Fwd PE | 45.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, COST is valued a bit more expensive than the industry average as 71.79% of the companies are valued more cheaply.
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 66.67% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.26 | ||
| EV/EBITDA | 31.34 |
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.
The excellent profitability rating of COST may justify a higher PE ratio.
PEG (NY)4.06
PEG (5Y)3.22
EPS Next 2Y11.39%
EPS Next 3Y11.39%
5. Dividend
5.1 Amount
With a yearly dividend of 0.55%, COST is not a good candidate for dividend investing.
COST's Dividend Yield is a higher than the industry average which is at 1.92.
Compared to an average S&P500 Dividend Yield of 2.30, COST's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.55% |
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
26.95% of the earnings are spent on dividend by COST. This is a low number and 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 2Y11.39%
EPS Next 3Y11.39%
924.16
-5.69 (-0.61%)
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 Change-1.13%
Ins Owners0.09%
Ins Owner Change1.02%
Market Cap409.57B
Revenue(TTM)275.24B
Net Income(TTM)8.10B
Analysts78.14
Price Target1083.63 (17.26%)
Short Float %1.57%
Short Ratio2.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.55% |
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)-0.62%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)0.22%
EPS NY rev (1m)0.09%
EPS NY rev (3m)0.14%
Revenue NQ rev (1m)0.57%
Revenue NQ rev (3m)0.66%
Revenue NY rev (1m)0.41%
Revenue NY rev (3m)0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.75 | ||
| Fwd PE | 45.11 | ||
| P/S | 1.49 | ||
| P/FCF | 52.26 | ||
| P/OCF | 30.71 | ||
| P/B | 14.04 | ||
| P/tB | 14.04 | ||
| EV/EBITDA | 31.34 |
EPS(TTM)18.21
EY1.97%
EPS(NY)20.48
Fwd EY2.22%
FCF(TTM)17.68
FCFY1.91%
OCF(TTM)30.09
OCFY3.26%
SpS621.05
BVpS65.81
TBVpS65.81
PEG (NY)4.06
PEG (5Y)3.22
Graham Number164.2
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%
ROICexgc growth 3Y2.25%
ROICexgc 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 | 9.6 |
F-Score7
WACC8.57%
ROIC/WACC2.28
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 Y12.49%
EPS Next 2Y11.39%
EPS Next 3Y11.39%
EPS Next 5Y9.4%
Revenue 1Y (TTM)8.17%
Revenue growth 3Y6.64%
Revenue growth 5Y10.54%
Sales Q2Q%8.1%
Revenue Next Year7.9%
Revenue Next 2Y7.74%
Revenue Next 3Y7.38%
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%
COSTCO WHOLESALE CORP / COST FAQ
What is the fundamental rating for COST stock?
ChartMill assigns a fundamental rating of 6 / 10 to COST.
Can you provide the valuation status for COSTCO WHOLESALE CORP?
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 8 / 10.
What are the PE and PB ratios of COSTCO WHOLESALE CORP (COST) stock?
The Price/Earnings (PE) ratio for COSTCO WHOLESALE CORP (COST) is 50.75 and the Price/Book (PB) ratio is 14.04.
What is the expected EPS growth for COSTCO WHOLESALE CORP (COST) stock?
The Earnings per Share (EPS) of COSTCO WHOLESALE CORP (COST) is expected to grow by 12.49% in the next year.