Costco Wholesale Corp. (COST) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Costco Wholesale Corp.

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Walmart, Inc.

Williams-Sonoma, Inc.

Target Corp.

Penske Automotive Group, Inc.

Tractor Supply Co.

CarMax, Inc.

AutoZone, Inc.

O'Reilly Automotive, Inc.

Why is Costco Wholesale Corp. ?

High Management Efficiency with a high ROE of 29.77%

The company is Net-Debt Free

Healthy long term growth as Net Sales has grown by an annual rate of 9.89% and Operating profit at 9.38%

With a growth in Net Profit of 15.19%, the company declared Very Positive results in May 26

The company has declared positive results for the last 2 consecutive quarters
OPERATING CASH FLOW(Y) Highest at USD 15,000 MM
DEBT-EQUITY RATIO (HY) Lowest at -35.11 %
DIVIDEND PER SHARE(HY) Highest at USD 88.63

With ROE of 26.64%, it has a fair valuation with a 13.60 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 3.49%, its profits have risen by 12.2% ; the PEG ratio of the company is 4.2

High Institutional Holdings at 82.21%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 2.11% over the previous quarter.

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to Costco Wholesale Corp. should be less than 10%
Overall Portfolio exposure to Retailing should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Retailing)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Costco Wholesale Corp. for you?

Low Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Costco Wholesale Corp.

3.49%

0.68

20.62%

S&P 500

16.26%

1.25

12.97%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

9.89%

EBIT Growth (5y)

9.38%

EBIT to Interest (avg)

51.30

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.33

Sales to Capital Employed (avg)

8.20

Tax Ratio

24.74%

Dividend Payout Ratio

27.02%

Pledged Shares

Institutional Holding

80.10%

ROCE (avg)

52.68%

ROE (avg)

29.77%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

13.60

EV to EBIT

38.76

EV to EBITDA

31.50

EV to Capital Employed

21.63

EV to Sales

1.48

PEG Ratio

4.19

Dividend Yield

0.53%

ROCE (Latest)

55.80%

ROE (Latest)

26.64%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Mildly Bullish

OBV

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

12What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 15,000 MM

DEBT-EQUITY RATIO (HY)

Lowest at -35.11 %

DIVIDEND PER SHARE(HY)

Highest at USD 88.63

INTEREST COVERAGE RATIO(Q)

Highest at 10,662.5

RAW MATERIAL COST(Y)

Fallen by 1.83% (YoY

CASH AND EQV(HY)

Highest at USD 38,236 MM

INVENTORY TURNOVER RATIO(HY)

Highest at 13.45 times

-3What is not working for the Company

ROCE(HY)

Lowest at 29.15%

DEBTORS TURNOVER RATIO(HY)

Lowest at 88.63 times

Here's what is working for Costco Wholesale Corp.

Operating Cash Flow

Highest at USD 15,000 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Interest Coverage Ratio

Highest at 10,662.5

in the last five periods

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Debt-Equity Ratio

Lowest at -35.11 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Dividend per share

Highest at USD 88.63 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

Cash and Eqv

Highest at USD 38,236 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Inventory Turnover Ratio

Highest at 13.45 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by 1.83% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Costco Wholesale Corp.

Debtors Turnover Ratio

Lowest at 88.63 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio