Costco Wholesale (COST) Delivers 166.1% Returns Over Five Years, Attracting Long-Term Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
0mins
Source: Fool
- Significant Shareholder Returns: Costco has achieved a remarkable 166.1% stock return over the past five years, significantly outperforming the S&P 500's 98.2%, highlighting its strong market performance and investment appeal.
- Membership Fee Advantage: By charging annual fees ($65 or $130), Costco attracts a loyal customer base, with paid memberships increasing from 76.2 million in 2024 to 81 million in 2025, maintaining a renewal rate around 90%, ensuring a stable revenue stream.
- Ongoing Expansion Potential: Costco consistently opens 20 to 30 new locations annually, ending the first quarter with 923 warehouses, indicating substantial growth opportunities both in the U.S. and internationally, particularly in markets like China, Spain, and France.
- Robust Operating Income: Costco's operating income grew by 12.2% year-over-year to approximately $2.5 billion, and its strategy of offering low-priced, high-quality goods continues to provide a competitive edge in the retail market.
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Analyst Views on COST
Wall Street analysts forecast COST stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 924.670
Low
769.00
Averages
1061
High
1205
Current: 924.670
Low
769.00
Averages
1061
High
1205
About COST
Costco Wholesale Corporation (Costco) operates membership warehouses and e-commerce sites that offer a selection of nationally branded and private-label products in a wide range of categories. The Company buys the majority of its merchandise directly from suppliers and route it to cross-docking consolidation points (depots) or directly to its warehouses. It operates 891 warehouses, including 614 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 35 in Japan, 29 in the United Kingdom, 19 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, and one each in Iceland, New Zealand and Sweden. It also operates e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. The Company provides wide selection of merchandise, plus the convenience of specialty departments and exclusive member services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Future Investment: Recommended Dividend Stocks
- Dividend Potential: To achieve an annual dividend income of $3,000 by 2036, investors need to purchase 156 shares of Costco (COST) at a total cost of approximately $146,000, despite the current yield being only 0.6%.
- Dividend Growth: Costco's quarterly dividend per share has increased from $0.45 in 2016 to $1.47 now, and if it maintains an average annual growth rate of over 12%, the dividend could reach $4.80 per share by 2036, totaling $19.20 annually.
- Capital Appreciation: Over the past decade, Costco's stock price has surged from $155 to $940, reflecting the company's robust expansion, and the potential for continued price increases makes the $146,000 investment worthwhile in the long run.
- Investment Timing: Although the current dividend yield is low, it is crucial for investors to recognize the importance of establishing strong future income investments now to ensure substantial returns later.
See More
Potential Impact of Costco Stock Split
- Psychological Impact of Stock Split: As Costco's stock price approaches $1,000, retail investors may feel priced out, and a split reducing the price to $200 could attract more investors, thereby boosting demand and potentially increasing the stock price.
- Historical Data Support: According to data from Bank of America's Research Investment Committee, companies that have split their stock over the past 40 years saw an average total return of over 25% in the 12 months following the split announcement, which is more than double the return of the S&P 500 during the same period, indicating the potential for short-term stock price boosts.
- Membership Loyalty and Expansion Plans: With a global membership renewal rate of 89.7%, Costco plans to increase its warehouse count from 914 to 940 by the end of fiscal 2026, demonstrating its ability to attract customers even amid economic uncertainty and enhancing its competitive position in the market.
- E-commerce Sales Growth: In its fiscal 2026 third-quarter report, Costco noted a 37% increase in e-commerce and app traffic, with digitally enabled comparable sales rising by 21.5%, indicating the company's growth potential beyond traditional retail and further strengthening its long-term business model resilience.
See More
Costco's Share Price Decline and Split Prospects
- Price Decline: Costco's share price fell below $1,000 on May 28 and has not recovered, currently trading around $950, indicating market uncertainty about its future despite potential for a stock split in 2026.
- Psychological Impact of Splits: Research indicates that stock split announcements can boost share prices, with companies experiencing an average total return of over 25% in the 12 months post-announcement, more than double the S&P 500's average, highlighting the importance of splits in attracting retail investors.
- Historical Split Record: Costco has not split its stock since 2000, demonstrating a cautious approach to such decisions; while the current price is below $1,000, the possibility of a split remains, reflecting the company's commitment to shareholder value.
- Strong Business Model: Costco's recession-resistant business model, driven by bulk pricing, attracts customers, with a global membership renewal rate of 89.7%, and plans to increase its warehouse count from 914 to 940 by the end of fiscal 2026, showcasing its long-term strategic expansion efforts.
See More
Investment Value Analysis of Costco and Amazon
- Stable Membership Revenue: Costco's membership renewal rate consistently exceeds 90% in the U.S. and Canada, indicating that the company can rely on high-margin membership income during economic fluctuations, thereby enhancing its financial stability and long-term investment appeal.
- Market Competitive Advantage: Costco's strong sourcing network allows it to offer low-priced goods, attracting customers even during economic downturns, which ensures its competitive edge in the retail market, particularly in providing essential goods.
- Amazon's AI Potential: Amazon's investments and developments in artificial intelligence, particularly through its AWS cloud computing business, have driven growth in recent years and are expected to continue generating substantial revenue in the coming years, despite concerns about the sustainability of tech spending.
- Investment Strategy Choice: For growth-oriented investors, Amazon may be an appealing option; however, in an uncertain economic environment, Costco offers greater stability, making Costco stock a better choice for most investors.
See More
Investment Comparison: Costco vs. Amazon
- Membership Revenue Advantage: Costco operates over 900 warehouses globally, with membership renewal rates consistently exceeding 90% in the U.S. and Canada, making its high-margin membership fees a stable profit source that enhances financial stability.
- Market Competitiveness: By offering low-priced goods and a robust sourcing network, Costco continues to attract customers even during economic downturns, ensuring its competitive edge in the retail market, particularly in essentials like food and fuel.
- Amazon's AI Potential: Amazon's strong presence in the global e-commerce market and its Prime membership program provide significant competitive advantages, especially with its applications in artificial intelligence, which have driven revenue growth and enhanced future profitability.
- Investment Strategy Consideration: While Costco typically trades at a premium, its valuation has recently declined, and Amazon's valuation has also seen a drop; investors should choose based on their risk tolerance, with Costco offering greater stability in uncertain environments.
See More
Target Stock Surges, Outperforming Retail Giants
- Recovery Plan Implementation: Under the leadership of new CEO Michael Fiddelke, Target has launched a recovery and growth plan expected to drive long-term growth, with the stock surging over 40% this year, significantly outperforming Costco and Walmart's gains of 10% and 3% respectively.
- Significant Revenue Growth: Despite facing multiple challenges, Target grew its revenue by over $20 billion from 2020 to 2022, maintaining annual revenue above $100 billion, demonstrating resilience and potential in the market.
- Digital and Brand Advantages: Target has made impressive strides in its digital business and in-store fulfillment, with about 40 owned brands generating over $30 billion in annual revenue, enhancing the company's margins and competitive position.
- Optimistic Outlook: Target achieved a 6.7% revenue growth in the first quarter and raised its full-year revenue growth forecast to 4%, with earnings per share expectations adjusted to the high end of the $7.50 to $8.50 range, despite challenges from low consumer sentiment.
See More
Future Investment: Recommended Dividend Stocks
- Dividend Potential: To achieve an annual dividend income of $3,000 by 2036, investors need to purchase 156 shares of Costco (COST) at a total cost of approximately $146,000, despite the current yield being only 0.6%.
- Dividend Growth: Costco's quarterly dividend per share has increased from $0.45 in 2016 to $1.47 now, and if it maintains an average annual growth rate of over 12%, the dividend could reach $4.80 per share by 2036, totaling $19.20 annually.
- Capital Appreciation: Over the past decade, Costco's stock price has surged from $155 to $940, reflecting the company's robust expansion, and the potential for continued price increases makes the $146,000 investment worthwhile in the long run.
- Investment Timing: Although the current dividend yield is low, it is crucial for investors to recognize the importance of establishing strong future income investments now to ensure substantial returns later.
See More
Potential Impact of Costco Stock Split
- Psychological Impact of Stock Split: As Costco's stock price approaches $1,000, retail investors may feel priced out, and a split reducing the price to $200 could attract more investors, thereby boosting demand and potentially increasing the stock price.
- Historical Data Support: According to data from Bank of America's Research Investment Committee, companies that have split their stock over the past 40 years saw an average total return of over 25% in the 12 months following the split announcement, which is more than double the return of the S&P 500 during the same period, indicating the potential for short-term stock price boosts.
- Membership Loyalty and Expansion Plans: With a global membership renewal rate of 89.7%, Costco plans to increase its warehouse count from 914 to 940 by the end of fiscal 2026, demonstrating its ability to attract customers even amid economic uncertainty and enhancing its competitive position in the market.
- E-commerce Sales Growth: In its fiscal 2026 third-quarter report, Costco noted a 37% increase in e-commerce and app traffic, with digitally enabled comparable sales rising by 21.5%, indicating the company's growth potential beyond traditional retail and further strengthening its long-term business model resilience.
See More
Costco's Share Price Decline and Split Prospects
- Price Decline: Costco's share price fell below $1,000 on May 28 and has not recovered, currently trading around $950, indicating market uncertainty about its future despite potential for a stock split in 2026.
- Psychological Impact of Splits: Research indicates that stock split announcements can boost share prices, with companies experiencing an average total return of over 25% in the 12 months post-announcement, more than double the S&P 500's average, highlighting the importance of splits in attracting retail investors.
- Historical Split Record: Costco has not split its stock since 2000, demonstrating a cautious approach to such decisions; while the current price is below $1,000, the possibility of a split remains, reflecting the company's commitment to shareholder value.
- Strong Business Model: Costco's recession-resistant business model, driven by bulk pricing, attracts customers, with a global membership renewal rate of 89.7%, and plans to increase its warehouse count from 914 to 940 by the end of fiscal 2026, showcasing its long-term strategic expansion efforts.
See More
Investment Value Analysis of Costco and Amazon
- Stable Membership Revenue: Costco's membership renewal rate consistently exceeds 90% in the U.S. and Canada, indicating that the company can rely on high-margin membership income during economic fluctuations, thereby enhancing its financial stability and long-term investment appeal.
- Market Competitive Advantage: Costco's strong sourcing network allows it to offer low-priced goods, attracting customers even during economic downturns, which ensures its competitive edge in the retail market, particularly in providing essential goods.
- Amazon's AI Potential: Amazon's investments and developments in artificial intelligence, particularly through its AWS cloud computing business, have driven growth in recent years and are expected to continue generating substantial revenue in the coming years, despite concerns about the sustainability of tech spending.
- Investment Strategy Choice: For growth-oriented investors, Amazon may be an appealing option; however, in an uncertain economic environment, Costco offers greater stability, making Costco stock a better choice for most investors.
See More
Investment Comparison: Costco vs. Amazon
- Membership Revenue Advantage: Costco operates over 900 warehouses globally, with membership renewal rates consistently exceeding 90% in the U.S. and Canada, making its high-margin membership fees a stable profit source that enhances financial stability.
- Market Competitiveness: By offering low-priced goods and a robust sourcing network, Costco continues to attract customers even during economic downturns, ensuring its competitive edge in the retail market, particularly in essentials like food and fuel.
- Amazon's AI Potential: Amazon's strong presence in the global e-commerce market and its Prime membership program provide significant competitive advantages, especially with its applications in artificial intelligence, which have driven revenue growth and enhanced future profitability.
- Investment Strategy Consideration: While Costco typically trades at a premium, its valuation has recently declined, and Amazon's valuation has also seen a drop; investors should choose based on their risk tolerance, with Costco offering greater stability in uncertain environments.
See More
Target Stock Surges, Outperforming Retail Giants
- Recovery Plan Implementation: Under the leadership of new CEO Michael Fiddelke, Target has launched a recovery and growth plan expected to drive long-term growth, with the stock surging over 40% this year, significantly outperforming Costco and Walmart's gains of 10% and 3% respectively.
- Significant Revenue Growth: Despite facing multiple challenges, Target grew its revenue by over $20 billion from 2020 to 2022, maintaining annual revenue above $100 billion, demonstrating resilience and potential in the market.
- Digital and Brand Advantages: Target has made impressive strides in its digital business and in-store fulfillment, with about 40 owned brands generating over $30 billion in annual revenue, enhancing the company's margins and competitive position.
- Optimistic Outlook: Target achieved a 6.7% revenue growth in the first quarter and raised its full-year revenue growth forecast to 4%, with earnings per share expectations adjusted to the high end of the $7.50 to $8.50 range, despite challenges from low consumer sentiment.
See More
