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If You Invested $1000 in Costco a Decade Ago, This is How Much It'd Be Worth Now

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For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Costco (COST - Free Report) ten years ago? It may not have been easy to hold on to COST for all that time, but if you did, how much would your investment be worth today?

Costco's Business In-Depth

With that in mind, let's take a look at Costco's main business drivers.

Based in Issaquah, Washington, Costco Wholesale Corporation sells high volumes of foods and general merchandise (including household products and appliances) at discounted prices through membership warehouses. It is one of the largest warehouse club operators in the United States. The company also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.

The company’s warehouses offer an array of low-priced nationally branded and select private labeled products in a wide range of merchandise categories. Costco offers three types of memberships to its customers: Business, Gold Star (individual), and Executive.

As of Jul 7, 2022, Costco operates 833 warehouses, including 574 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, and two each in France and China, and one in Iceland.

Costco generates revenue from two sources: 1) Store sales (Net sales; 98% of fiscal 2021 total revenue) and 2) Membership fees (MFI; 2% of fiscal 2021 total revenue).

Costco offers myriad varieties of food products as well as a vast range of household and lifestyle products, stationeries and appliances. The company also sells gasoline to customers at cheap prices and offers merchandise in the following categories:

Food and Sundries (including dry foods, packaged foods, groceries, snack foods, candy, alcoholic and nonalcoholic beverages, and
cleaning supplies)

Hardlines (including major 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)

Ancillary (including gasoline and pharmacy businesses).

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Costco ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in August 2012 would be worth $5,574.09, or a gain of 457.41%, as of August 1, 2022, and this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 198.01% and the price of gold went up 5.78% over the same time frame.

Looking ahead, analysts are expecting more upside for COST.

Being a consumer defensive stock, Costco has been surviving the market turmoil pretty well. The discount retailer’s key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping it register impressive sales and earnings numbers. We expect the company to register an 18.6% adjusted earnings per share improvement in fiscal 2022 on 14.7% revenue growth. This outlook accounts for the businesses’ ability to navigate the ongoing inflationary environment and supply chain bottlenecks on several fronts. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help Costco keep outperforming. While trading at a premium to its peers, its long-term growth prospects should help the stock see a solid upside.

The stock is up 11.43% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2022. The consensus estimate has moved up as well.

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