Costco Wholesale Corp
🇺🇸 COST · NYSE/NASDAQ · US22160K1051
Consumer
USD 1014.96 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
52.8
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 1014.96 ÷ 19.23 = 52.8
TTM period through: 2026-02-28
Forward P/E (estimated): 49.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 52.9
Yield (Fwd)
0.51%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 0.52%
Net Debt/EBITDA (TTM)
-0.7x
Latest quarter: -2.7x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-02-28
Latest quarter (2026-02-28): -2.7x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
27.1%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 33.0%
Cash Flow Payout (TTM): 18.8%
FCF Coverage (TTM): 3.22x
ROE
29.6%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
30.7x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Costco is a world-class consumer retailer with an unassailable membership-based moat and a fortress balance sheet. While the company boasts flawless fundamentals and highly safe cash flows, the extreme valuation at a P/E near 53 and a nominal yield of just 0.52% makes it unsuitable for immediate capital deployment in an income strategy. Existing shareholders should maintain positions given the exceptional business quality, but new dividend-focused investors must wait for a significant market correction before considering entry.
Sector Context
Costco operates a global chain of membership-only warehouse clubs, generating revenue primarily through bulk retail sales and highly predictable, high-margin membership fees. Within the consumer staples space, Costco's business model provides exceptional defense against inflation and economic downturns, though its current valuation multiples increasingly resemble high-growth tech rather than traditional defensive retail.
📊 Strategy Analysis
- • Exceptional business fundamentals supported by a highly defensive membership-based moat and an impressive ROE of 29.65%.
- • Fortress balance sheet featuring a Net Debt/EBITDA of -0.65x, indicating a strong net cash position with virtually zero refinancing risk.
- • Consistent long-term execution with a 10-year revenue CAGR of 8.8% and flawless dividend coverage, where free cash flow covers the dividend 3.22 times over.
⚠ What to Watch
- • Extreme valuation multiples with a TTM P/E of 52.79x, drastically exceeding the strategy's target range of 8-15x.
- • Current dividend yield of just 0.52% falls completely short of the 3% minimum requirement for income-focused portfolios.
- • The current share price of $1014.96 sits massively above historical fair value and monopoly premium upper bounds, offering zero margin of safety.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.