Costco Wholesale Corp
🇺🇸 COST · NYSE/NASDAQ · US22160K1051
Consumer
USD 1048.95 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
54.6
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: 1048.95 ÷ 19.23 = 54.6
TTM period through: 2026-02-28
Forward P/E (estimated): 45.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 54.1
Yield (Fwd)
0.56%
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): 0.50%
Div. Growth (5Y CAGR)
8.1%
Net Debt/EBITDA (TTM)
-0.7x
Latest quarter: -3.0x
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): -3.0x
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)
30.6%
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
31.1x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Costco is an exceptionally high-quality retailer with an unassailable membership-based moat and a fortress balance sheet. While the underlying business remains remarkably robust with predictable cash flows, the current extreme valuation (P/E 55) and sub-1% dividend yield make it an unsuitable entry point for income-focused strategies. Existing shareholders should maintain positions given the flawless fundamentals, but new investors should monitor the stock for a significant broader market correction before considering.
Sector Context
Costco operates a membership-based warehouse club model, selling bulk merchandise at low margins while generating the vast majority of its profits from highly recurring membership fees. In the context of dividend investing, dominant consumer retailers with strong moats provide highly visible, recession-resistant cash flows, though extreme market premiums can negate their attractiveness for new income-focused capital.
📊 Strategy Analysis
- • Exceptional business quality with an unassailable membership moat, driving consistent revenue growth and a high ROE of 29.65%.
- • Fortress balance sheet with negative net debt (Net Debt/EBITDA of -0.65x) and strong free cash flow generation easily covering obligations.
- • Continued fundamental momentum evidenced by a recent 13% regular dividend hike and strong April sales growth.
⚠ What to Watch
- • Extreme valuation multiples with a TTM P/E of 54.56x, drastically exceeding conservative target ranges and pricing in flawless future execution.
- • The current dividend yield of 0.50% falls substantially short of the typical income requirements for dividend-focused portfolios.
- • Current share price of $1048 trades massively above the estimated monopoly fair value upper bound of $346, 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: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.