Why Costco (COST) is a Top Value Stock for the Long-Term
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.
Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.
Why Investors Should Pay Attention to This Value Stock
Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.
Costco (COST)
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.
COST sits at a Zacks Rank #3 (Hold), holds a Value Style Score of B, and has a VGM Score of B. Compared to the Retail - Discount Stores industry's P/E of 20.5X, shares of Costco are trading at a forward P/E of 50.9X. COST also has a PEG Ratio of 5.5, a Price/Cash Flow ratio of 46.2X, and a Price/Sales ratio of 1.6X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.00 to $16.22 per share. COST has an average earnings surprise of 2.3%.
With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding COST to their portfolios.
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Costco Wholesale Corporation (COST) : Free Stock Analysis Report