Categories Retail

Why Costco Wholesale stock soared to a record high

Costco Wholesale Corporation (NASDAQ: COST) stock soared to a record high of $269.69 on Monday as market analysts believe its new stores could yield better productivity. Also, they believe the warehouse retailer’s subscription model to be less risky than other retail chains.

Investors expect the company to outperform in the e-commerce operations in the future with five websites in the US, Canada, Mexico, UK, Korea, and Taiwan. Also, the company’s warehouses operations remained strong and opening of warehouses in new markets are expected to strengthen its growth in the future.

The company’s paid membership growth rate could be positively impacted by warehouse openings that occur in new markets as compared to existing markets. The membership format remained an integral part of its business and has a significant effect on its profitability.

Why Costco Wholesale stock soars to record high
Photo Courtesy: Costco Wholesale / Facebook post

The competition with rivals remained fruitful for Costco, which has taken the cup of victory during the past two quarters. Major general merchandise retail competitors included Walmart (NYSE: WMT), Target (NYSE: TGT), Kroger (NYSE: KR), and Amazon.com (NASDAQ: AMZN). Also, Costco competes with warehouse club operations primarily Walmart’s Sam’s Club and BJ’s Wholesale Club (NYSE: BJ).

In the recently completed third-quarter, Costco has a total debt of $6.5 billion with $1.7 billion remained the current portion and the long term debt stood at $4.8 billion. In contrast, the company has sufficient cash and short-term investments in the hand of $8.16 billion.

It is expected that the liabilities don’t pose much threat given the company’s immense market cap of $118.48 billion. The total debt-to-equity ratio is at 0.44 and this means the company is not aggressive in financing its growth with debt. But, Costco could borrow cheaply and has a relatively stable income.

Also read: PriceSmart Q3 earnings preview

The shareholders of Costco could rejoice about the company paying dividends at regular intervals with a payout ratio of 29%. It has a forward annual dividend yield of 0.98%. The last dividend date was May 24, 2019, and Costco is expected to unveil a dividend during the fourth quarter earnings announcement.

Shares of Costco ended Monday’s regular session up 0.43% at $269.40 on the Nasdaq. The stock has risen over 28% in the past year and over 9% in the past three months. The 50-day moving average stood at $256.37 while the 200-day moving average remained at $233.31.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

HOG Earnings: Key quarterly highlights from Harley-Davidson’s Q4 2022 financial results

Harley-Davidson, Inc. (NYSE: HOG) reported fourth quarter 2022 earnings results today. Revenue increased 12% year-over-year to $1.14 billion. Net income attributable to Harley-Davidson, Inc. rose 94% YoY to $42 million,

After positive Q4, Advanced Micro Devices (AMD) looks at a mixed 2023

Advanced Micro Devices, Inc. (NASDAQ: AMD) this week issued a cautious outlook for the first quarter of 2023, after reporting stronger-than-expected fourth-quarter results. The chipmaker did not provide full-year guidance,

META Earnings: All you need to know about Meta Platforms’ Q4 2022 earnings results

Meta Platforms, Inc. (NASDAQ: META) reported fourth quarter 2022 earnings results today. Revenue declined 4% year-over-year to $32.17 billion. Net income fell 55% to $4.6 billion while EPS dropped 52%

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top