It’s not just Costco‘s (COST +2.93%) packaged merchandise trading in large sizes. The leading warehouse club operator also has a bulk-size price. Costco closed at $922.77 on Friday. Don’t let the large price dissuade you.
You would need to shell out more than $92,000 to buy a round lot of Costco, but don’t let the steep potential cover charge dissuade you. Your broker may offer fractional shares, but even if that’s not the case, a single share for a little more than $920 could set you up nicely for the years ahead.
Image source: Getty Images.
A real deal
Here’s the deal. Costco stock may seem pricey, but it’s actually trading 2% lower than it was a year ago. This is opportunity knocking, even if you’re not a card-carrying member of the warehouse club chain. Costco is still growing.
Revenue has increased 10% over the past year, while the bottom line has risen even faster. Its latest quarterly update — announced late last week — was another earnings beat, even if you back out some coffer-padding tariff refunds.
Today’s Change
(2.93%) $26.29
Current Price
$922.77
Key Data Points
Market Cap
Day’s Range
$883.10 – $925.14
52wk Range
$844.06 – $1096.50
Volume
4.6M
Avg Vol
2.2M
Gross Margin
13.41%
Dividend Yield
0.60%
Costco has traditionally been a low-beta stock, holding up well during market setbacks given its somewhat recession-resistant value proposition. Beyond the dividend that it has increased for 22 consecutive years, it should also announce a larger special distribution later this year.
Add it all up, and Costco is a quality stock worth owning. Your next $1,000 to invest can be put to work on buying 100 shares or more of a speculative stock trading in the single digits, but a single share of Costco could be the better investment.
Rick Munarriz has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
