COSTCO WHOLESALE CORP (CTO.DE) Stock Fundamental Analysis
FRA:CTO - Deutsche Boerse Ag - US22160K1051 - Common Stock - Currency: EUR
Overall CTO gets a fundamental rating of 6 out of 10. We evaluated CTO against 25 industry peers in the Consumer Staples Distribution & Retail industry. Both the health and profitability get an excellent rating, making CTO a very profitable company, without any liquidiy or solvency issues. CTO is valied quite expensively at the moment, while it does show a decent growth rate. These ratings could make CTO a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
CTO had positive earnings in the past year.
In the past year CTO had a positive cash flow from operations.
CTO had positive earnings in each of the past 5 years.
In the past 5 years CTO always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CTO (10.41%) is better than 100.00% of its industry peers.
With an excellent Return On Equity value of 29.80%, CTO belongs to the best of the industry, outperforming 96.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 20.16%, CTO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CTO is significantly above the industry average of 9.13%.
The last Return On Invested Capital (20.16%) for CTO is above the 3 year average (18.60%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.41% | ||
| ROE | 29.8% | ||
| ROIC | 20.16% |
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 2.89%, CTO belongs to the top of the industry, outperforming 84.00% of the companies in the same industry.
CTO's Profit Margin has improved in the last couple of years.
CTO has a Operating Margin (3.69%) which is in line with its industry peers.
CTO's Operating Margin has improved in the last couple of years.
The Gross Margin of CTO (12.67%) is worse than 84.00% of its industry peers.
In the last couple of years the Gross Margin of CTO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.69% | ||
| PM (TTM) | 2.89% | ||
| GM | 12.67% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so CTO is creating value.
The number of shares outstanding for CTO remains at a similar level compared to 1 year ago.
The number of shares outstanding for CTO has been increased compared to 5 years ago.
Compared to 1 year ago, CTO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 10.06 indicates that CTO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 10.06, CTO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
CTO has a debt to FCF ratio of 0.83. This is a very positive value and a sign of high solvency as it would only need 0.83 years to pay back of all of its debts.
CTO has a Debt to FCF ratio of 0.83. This is amongst the best in the industry. CTO outperforms 100.00% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that CTO is not too dependend on debt financing.
CTO has a better Debt to Equity ratio (0.23) than 96.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | 10.06 |
ROIC/WACC2.29
WACC8.81%
2.3 Liquidity
CTO has a Current Ratio of 1.00. This is a bad value and indicates that CTO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.00, CTO is in the better half of the industry, outperforming 68.00% of the companies in the same industry.
A Quick Ratio of 0.49 indicates that CTO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.49, CTO is in line with its industry, outperforming 44.00% of the companies in the same industry.
CTO 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 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
CTO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.03%, which is quite good.
The Earnings Per Share has been growing by 15.11% on average over the past years. This is quite good.
CTO shows a small growth in Revenue. In the last year, the Revenue has grown by 6.13%.
Measured over the past years, CTO shows a quite strong growth in Revenue. The Revenue has been growing by 10.75% on average per year.
EPS 1Y (TTM)12.03%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%2.55%
Revenue 1Y (TTM)6.13%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%9.04%
3.2 Future
CTO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.68% yearly.
Based on estimates for the next years, CTO will show a small growth in Revenue. The Revenue will grow by 6.74% on average per year.
EPS Next Y11.48%
EPS Next 2Y10.98%
EPS Next 3Y10.94%
EPS Next 5Y10.68%
Revenue Next Year7.54%
Revenue Next 2Y7.33%
Revenue Next 3Y6.99%
Revenue Next 5Y6.74%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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 58.95, CTO can be considered very expensive at the moment.
76.00% of the companies in the same industry are cheaper than CTO, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of CTO to the average of the S&P500 Index (23.99), we can say CTO is valued expensively.
With a Price/Forward Earnings ratio of 49.48, CTO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CTO indicates a rather expensive valuation: CTO more expensive than 84.00% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of CTO to the average of the S&P500 Index (20.35), we can say CTO is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.95 | ||
| Fwd PE | 49.48 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CTO is valued a bit more expensive than the industry average as 76.00% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, CTO is valued expensively inside the industry as 80.00% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 64.7 | ||
| EV/EBITDA | 36.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CTO does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of CTO may justify a higher PE ratio.
PEG (NY)5.13
PEG (5Y)3.9
EPS Next 2Y10.98%
EPS Next 3Y10.94%
5. Dividend
5.1 Amount
CTO has a yearly dividend return of 0.52%, which is pretty low.
Compared to an average industry Dividend Yield of 4.05, CTO is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.44, CTO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
5.2 History
The dividend of CTO is nicely growing with an annual growth rate of 53.89%!
Dividend Growth(5Y)53.89%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
20.26% of the earnings are spent on dividend by CTO. This is a low number and sustainable payout ratio.
CTO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP20.26%
EPS Next 2Y10.98%
EPS Next 3Y10.94%
FRA:CTO (5/8/2025, 5:29:55 PM)
888.9
+0.7 (+0.08%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners71.84%
Inst Owner ChangeN/A
Ins Owners0.09%
Ins Owner ChangeN/A
Market Cap394.39B
Analysts78.3
Price Target953.03 (7.21%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.52% |
Yearly Dividend17.99
Dividend Growth(5Y)53.89%
DP20.26%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.23%
Min EPS beat(2)-4.04%
Max EPS beat(2)4.5%
EPS beat(4)3
Avg EPS beat(4)0.72%
Min EPS beat(4)-4.04%
Max EPS beat(4)4.5%
EPS beat(8)5
Avg EPS beat(8)-0.21%
EPS beat(12)7
Avg EPS beat(12)-0.16%
EPS beat(16)11
Avg EPS beat(16)2.22%
Revenue beat(2)0
Avg Revenue beat(2)-1.45%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)-1.05%
Revenue beat(4)0
Avg Revenue beat(4)-1.68%
Min Revenue beat(4)-2.61%
Max Revenue beat(4)-1.05%
Revenue beat(8)0
Avg Revenue beat(8)-1.99%
Revenue beat(12)0
Avg Revenue beat(12)-1.91%
Revenue beat(16)2
Avg Revenue beat(16)-1.41%
PT rev (1m)-5.03%
PT rev (3m)-3.61%
EPS NQ rev (1m)0.37%
EPS NQ rev (3m)0.14%
EPS NY rev (1m)-0.35%
EPS NY rev (3m)-0.57%
Revenue NQ rev (1m)0.22%
Revenue NQ rev (3m)0.81%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 58.95 | ||
| Fwd PE | 49.48 | ||
| P/S | 1.7 | ||
| P/FCF | 64.7 | ||
| P/OCF | 37.44 | ||
| P/B | 17.52 | ||
| P/tB | 17.52 | ||
| EV/EBITDA | 36.4 |
EPS(TTM)15.08
EY1.7%
EPS(NY)17.97
Fwd EY2.02%
FCF(TTM)13.74
FCFY1.55%
OCF(TTM)23.74
OCFY2.67%
SpS523.96
BVpS50.75
TBVpS50.75
PEG (NY)5.13
PEG (5Y)3.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.41% | ||
| ROE | 29.8% | ||
| ROCE | 26.92% | ||
| ROIC | 20.16% | ||
| ROICexc | 31.66% | ||
| ROICexgc | 31.66% | ||
| OM | 3.69% | ||
| PM (TTM) | 2.89% | ||
| GM | 12.67% | ||
| FCFM | 2.62% |
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-Score8
Asset Turnover3.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 0.83 | ||
| Debt/EBITDA | 0.48 | ||
| Cap/Depr | 217.05% | ||
| Cap/Sales | 1.91% | ||
| Interest Coverage | 79.93 | ||
| Cash Conversion | 99.11% | ||
| Profit Quality | 90.87% | ||
| Current Ratio | 1 | ||
| Quick Ratio | 0.49 | ||
| Altman-Z | 10.06 |
F-Score8
WACC8.81%
ROIC/WACC2.29
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)12.03%
EPS 3Y14.32%
EPS 5Y15.11%
EPS Q2Q%2.55%
EPS Next Y11.48%
EPS Next 2Y10.98%
EPS Next 3Y10.94%
EPS Next 5Y10.68%
Revenue 1Y (TTM)6.13%
Revenue growth 3Y9.1%
Revenue growth 5Y10.75%
Sales Q2Q%9.04%
Revenue Next Year7.54%
Revenue Next 2Y7.33%
Revenue Next 3Y6.99%
Revenue Next 5Y6.74%
EBIT growth 1Y14.64%
EBIT growth 3Y8.31%
EBIT growth 5Y14.41%
EBIT Next Year39.65%
EBIT Next 3Y19.84%
EBIT Next 5Y15.88%
FCF growth 1Y26.48%
FCF growth 3Y7.27%
FCF growth 5Y14.57%
OCF growth 1Y25.49%
OCF growth 3Y8.17%
OCF growth 5Y12.27%