#8 - Costco (NASDAQ:COST)
Costco (COST)
P/E Ratio: 39.00
Dividend Yield: 0.86%
We wrap things up by looking at another way to play the consumer staples segment. Costco (NASDAQ: COST) is a club-based warehouse retailer that seems to be front and center in the nationwide mask debate these days. But what investors need to know is that it has 770 locations and is far and away the leader in this small sector.
COST’s P/E ratio of 39 makes it one of the more expensive stocks in this sector. And the consensus price target suggests the stock is priced about right. But when you consider that Costco is managing to not only hold its own but continue to grow with Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) as competitors. In the company’s most recent fiscal year, it posted same-store sales (stripped of gasoline sales) that grew 6.8%. This is perhaps one of the most important metrics that analysts look at to measure the health of a company.
And you’ll benefit from a reliable dividend that the company has increased for the last 16 consecutive years.
About Costco Wholesale
Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, Mexico, Japan, the United Kingdom, Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand, and Sweden. The company offers branded and private-label products in a range of merchandise categories.
Read More - Current Price
- $971.50
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $908.81 (6.5% Downside)
Consumer staple stocks aren’t the sexy technology stocks that have a tendency to go up simply because they are technology stocks. The problem that you’ve likely experienced is that what goes up frequently goes down. And just as fast as it goes up.
But what consumer staples may lack in style, they more than make up for in substance. And this substance can give investors a feeling of certainty in uncertain and volatile signs. And that’s why these stocks deserve a place in your portfolio. They may not be the stocks you brag about when you’re sitting at the nineteenth hole, but they’re stocks that will help you rest easy during volatile times.
In addition to being defensive, non-cyclical stocks, consumer staples frequently pay out a solid dividend. Because of the dividend, these stocks tend to outperform many stocks in down markets. In fact, many of these stocks belong to the exclusive club of Dividend Aristocrats, which means the companies have increased the dividend payout every year for at least 25 consecutive years.
More Investing Slideshows:
