Costco Wholesale (NASDAQ: COST) is one of 12 public companies in the “Variety stores” industry, but how does it compare to its competitors? We will compare Costco Wholesale to similar businesses based on the strength of its profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.
Institutional and Insider Ownership
73.0% of Costco Wholesale shares are owned by institutional investors. Comparatively, 76.5% of shares of all “Variety stores” companies are owned by institutional investors. 0.6% of Costco Wholesale shares are owned by company insiders. Comparatively, 13.8% of shares of all “Variety stores” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Costco Wholesale pays an annual dividend of $2.00 per share and has a dividend yield of 1.0%. Costco Wholesale pays out 34.4% of its earnings in the form of a dividend. As a group, “Variety stores” companies pay a dividend yield of 1.6% and pay out 36.6% of their earnings in the form of a dividend. Costco Wholesale has raised its dividend for 14 consecutive years.
This table compares Costco Wholesale and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Costco Wholesale Competitors||3.76%||15.00%||6.64%|
Risk & Volatility
Costco Wholesale has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Costco Wholesale’s competitors have a beta of 0.89, suggesting that their average stock price is 11% less volatile than the S&P 500.
Earnings & Valuation
This table compares Costco Wholesale and its competitors top-line revenue, earnings per share and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Costco Wholesale||$129.03 billion||$2.68 billion||33.68|
|Costco Wholesale Competitors||$65.63 billion||$1.74 billion||22.27|
Costco Wholesale has higher revenue and earnings than its competitors. Costco Wholesale is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
This is a summary of current ratings and price targets for Costco Wholesale and its competitors, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Costco Wholesale Competitors||164||1265||1702||90||2.53|
Costco Wholesale presently has a consensus target price of $192.52, suggesting a potential downside of 1.78%. As a group, “Variety stores” companies have a potential upside of 3.26%. Given Costco Wholesale’s competitors higher possible upside, analysts clearly believe Costco Wholesale has less favorable growth aspects than its competitors.
Costco Wholesale beats its competitors on 9 of the 15 factors compared.
About Costco Wholesale
Costco Wholesale Corporation is engaged in the operation of membership warehouses in the United States and Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Australia, Spain, and through its subsidiaries in Taiwan and Korea. As of August 28, 2016, the Company operated 715 warehouses across the world. The Company’s average warehouse space is approximately 144,000 square feet. The Company’s warehouses on average operate on a seven-day, 70-hour week. The Company offers merchandise in various categories, which include foods (including dry foods, packaged foods and groceries); sundries (including snack foods, candy, alcoholic and nonalcoholic beverages, and cleaning supplies); hardlines (including appliances, electronics, health and beauty aids, hardware, and garden and patio); fresh foods (including meat, produce, deli and bakery); softlines (including apparel and small appliances), and other (including gas stations and pharmacy).
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