Investment Comparison: Costco vs. Home Depot
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 17 2026
0mins
Should l Buy COST?
Source: Fool
- Stable Sales Growth: Costco achieved $270 billion in net sales for fiscal 2025, with a total return of 199% over the past five years, demonstrating strong performance in the retail market that continues to attract investor interest despite economic fluctuations.
- Membership Model Advantage: Costco's membership base grew by 5.2% year-over-year in Q1 of fiscal 2026 to 81.4 million, with a global renewal rate of 89.7%, providing a stable, high-margin revenue stream that enhances customer loyalty.
- Market Expansion Potential: With 921 warehouses currently, Costco's management aims for 30 net new openings annually, indicating significant growth potential both domestically and internationally, which bodes well for future expansion.
- Home Depot Market Challenges: While Home Depot thrived during the pandemic with double-digit revenue growth, its same-store sales only increased by 0.2% in Q3 of fiscal 2025, highlighting the cyclical demand challenges it faces, necessitating reliance on brand strength and market opportunities to maintain competitiveness.
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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: 1003.700
Low
769.00
Averages
1061
High
1205
Current: 1003.700
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.
Costco's Share Price Surpasses $1,000 Mark
- Stock Performance: Costco's share price is currently around $1,000, which may shock some investors; however, this price does not indicate overvaluation but rather reflects the company's strong market performance and stable financial health.
- Financial Metrics: In its recent second-quarter earnings report, Costco achieved a 7.4% year-over-year increase in net sales and a remarkable 22.6% growth in digital sales, with net income exceeding $2 billion and diluted earnings per share at $4.58, showcasing the company's sustained profitability and growth potential.
- Dividend Increase: On April 15, Costco announced a $0.17 increase in its quarterly cash dividend, bringing the annual payout to $5.88 per share, which enhances investor return expectations and reflects the company's strong cash flow and profitability.
- Competitive Advantage: With a membership renewal rate exceeding 90%, Costco enjoys predictable cash flow and can offer lower prices, as evidenced by Consumer Reports indicating its prices are 21.4% lower than Walmart's, establishing a strong competitive moat in the retail sector.
See More
Costco Stock Rises 17% Amid Competitive Consumer Goods Analysis
- Costco Stock Performance: In 2026, Costco's stock surged approximately 17%, reflecting investor preference for defensive consumer goods stocks, although its high valuation at 49 times earnings poses risks.
- Coca-Cola's Strength: Coca-Cola's stock is up 7% year-to-date, offering a stable sales outlook and a 2.8% dividend yield at a 23 times P/E ratio, with management forecasting 4% to 5% organic revenue growth for 2026, indicating further margin expansion.
- Dollar General's Resilient Growth: Dollar General has consistently achieved same-store sales growth over the past 36 years, trading at a 17 times P/E ratio in 2026, with a 1.90% dividend yield reflecting its strong competitive position in rural markets.
- TJX Companies' Expansion Potential: TJX operates over 5,200 stores globally, generating over $60 billion in annual sales, with same-store sales growth between 4% and 5%, showcasing resilience in the discount retail market and significant expansion potential.
See More
Analysis of Coca-Cola and Other Consumer Goods Companies
- Coca-Cola's Market Strength: Coca-Cola generates $48 billion in annual sales with an estimated 2.2 billion servings consumed daily, leveraging strong retail relationships and brand influence to drive sales growth, with a projected 4% to 5% organic revenue growth in 2026, suggesting further margin expansion.
- Dividend King Status: Coca-Cola has increased its dividend for 64 consecutive years, currently offering a 2.8% dividend yield supported by a 67% payout ratio, showcasing its stable cash flow and long-term investment value.
- Dollar General's Resilience: Dollar General has achieved consistent same-store sales growth over the past 36 years, with last year's sales reaching $42 billion and a same-store sales growth rate of 3%, demonstrating its strong competitive position in rural America.
- TJX Companies' Expansion Potential: TJX operates over 5,200 stores globally with annual sales exceeding $60 billion, maintaining a same-store sales growth rate of 4% to 5% despite economic challenges, with management targeting an expansion to over 7,000 stores, indicating robust growth potential.
See More
Costco's Kirkland Energy Drink Launch Sparks Industry Buzz
- Product Positioning: Costco's new Kirkland Signature Sparkling Energy Drink, featuring zero sugar and lightly carbonated, contains 200 mg of caffeine and about 10 calories per 12 oz can, positioning it as a strong alternative to brands like Celsius, likely appealing to value-seeking consumers.
- Pricing Advantage: Priced at approximately $16.99 for a 24-can pack, this significantly undercuts competitors' multipacks, potentially exerting pricing pressure on the market and enhancing Costco's competitive edge in the energy drink sector.
- Consumer Feedback: Early reception has been broadly positive, particularly regarding taste and value, with Costco's online communities and energy drink forums heavily recommending it, indicating strong potential appeal among existing Celsius and Alani drinkers.
- Market Demand: Evercore ISI reported that at a recent regional meeting for Costco managers in the Northeast, there was strong demand for the product, signaling a likely larger rollout that could pressure Celsius Holdings.
See More
Trump Warns Companies Not Seeking Tariff Refunds
- Tariff Refund Policy: Trump stated he will 'remember' companies that do not seek refunds, implying these firms might receive government support in the future, thereby influencing corporate refund decisions and their relationship with the government.
- Refund System Launch: The U.S. Customs and Border Protection (CBP) launched the CAPE refund processing system on Monday, expected to handle up to $166 billion in refund applications, although payments are not anticipated until 60 to 90 days post-application acceptance.
- Legal Action Dynamics: Major companies like Costco and FedEx have sued the U.S. government to secure timely tariff refunds, while Walmart and Amazon have refrained from litigation, possibly to avoid negative attention from Trump.
- Future Tariff Plans: Trump mentioned that the alternative tariffs being developed could yield higher revenue but will be more complex to implement, with these new tariffs not expected to take effect until July, potentially impacting corporate financial planning.
See More
Three Retail Giants Gain Market Share
- Costco's Profit Growth: Costco's net margin has reached 3%, with membership fees contributing over half of its profits despite only accounting for 2% of revenue, showcasing its resilience and potential for sustained growth amid economic uncertainty.
- Dutch Bros.' Rapid Expansion: Dutch Bros. reported a 29% revenue increase in its latest quarter, alongside a 7.7% rise in comparable-store sales, demonstrating its strong appeal among young consumers and significant market potential yet to be tapped.
- Five Below's Strong Performance: Five Below's net sales surged 24% in the latest quarter, matching Dutch Bros.' growth momentum, indicating that under new CEO Winnie Park, the company is regaining market attention and is poised for continued growth in the coming years.
- Intensifying Market Competition: While these three companies operate in distinct niches, they are all gaining market share in their respective fields, reflecting a rising consumer demand for diverse retail experiences, which may lead to increased competition in the future.
See More
Costco's Share Price Surpasses $1,000 Mark
- Stock Performance: Costco's share price is currently around $1,000, which may shock some investors; however, this price does not indicate overvaluation but rather reflects the company's strong market performance and stable financial health.
- Financial Metrics: In its recent second-quarter earnings report, Costco achieved a 7.4% year-over-year increase in net sales and a remarkable 22.6% growth in digital sales, with net income exceeding $2 billion and diluted earnings per share at $4.58, showcasing the company's sustained profitability and growth potential.
- Dividend Increase: On April 15, Costco announced a $0.17 increase in its quarterly cash dividend, bringing the annual payout to $5.88 per share, which enhances investor return expectations and reflects the company's strong cash flow and profitability.
- Competitive Advantage: With a membership renewal rate exceeding 90%, Costco enjoys predictable cash flow and can offer lower prices, as evidenced by Consumer Reports indicating its prices are 21.4% lower than Walmart's, establishing a strong competitive moat in the retail sector.
See More
Costco Stock Rises 17% Amid Competitive Consumer Goods Analysis
- Costco Stock Performance: In 2026, Costco's stock surged approximately 17%, reflecting investor preference for defensive consumer goods stocks, although its high valuation at 49 times earnings poses risks.
- Coca-Cola's Strength: Coca-Cola's stock is up 7% year-to-date, offering a stable sales outlook and a 2.8% dividend yield at a 23 times P/E ratio, with management forecasting 4% to 5% organic revenue growth for 2026, indicating further margin expansion.
- Dollar General's Resilient Growth: Dollar General has consistently achieved same-store sales growth over the past 36 years, trading at a 17 times P/E ratio in 2026, with a 1.90% dividend yield reflecting its strong competitive position in rural markets.
- TJX Companies' Expansion Potential: TJX operates over 5,200 stores globally, generating over $60 billion in annual sales, with same-store sales growth between 4% and 5%, showcasing resilience in the discount retail market and significant expansion potential.
See More
Analysis of Coca-Cola and Other Consumer Goods Companies
- Coca-Cola's Market Strength: Coca-Cola generates $48 billion in annual sales with an estimated 2.2 billion servings consumed daily, leveraging strong retail relationships and brand influence to drive sales growth, with a projected 4% to 5% organic revenue growth in 2026, suggesting further margin expansion.
- Dividend King Status: Coca-Cola has increased its dividend for 64 consecutive years, currently offering a 2.8% dividend yield supported by a 67% payout ratio, showcasing its stable cash flow and long-term investment value.
- Dollar General's Resilience: Dollar General has achieved consistent same-store sales growth over the past 36 years, with last year's sales reaching $42 billion and a same-store sales growth rate of 3%, demonstrating its strong competitive position in rural America.
- TJX Companies' Expansion Potential: TJX operates over 5,200 stores globally with annual sales exceeding $60 billion, maintaining a same-store sales growth rate of 4% to 5% despite economic challenges, with management targeting an expansion to over 7,000 stores, indicating robust growth potential.
See More
Costco's Kirkland Energy Drink Launch Sparks Industry Buzz
- Product Positioning: Costco's new Kirkland Signature Sparkling Energy Drink, featuring zero sugar and lightly carbonated, contains 200 mg of caffeine and about 10 calories per 12 oz can, positioning it as a strong alternative to brands like Celsius, likely appealing to value-seeking consumers.
- Pricing Advantage: Priced at approximately $16.99 for a 24-can pack, this significantly undercuts competitors' multipacks, potentially exerting pricing pressure on the market and enhancing Costco's competitive edge in the energy drink sector.
- Consumer Feedback: Early reception has been broadly positive, particularly regarding taste and value, with Costco's online communities and energy drink forums heavily recommending it, indicating strong potential appeal among existing Celsius and Alani drinkers.
- Market Demand: Evercore ISI reported that at a recent regional meeting for Costco managers in the Northeast, there was strong demand for the product, signaling a likely larger rollout that could pressure Celsius Holdings.
See More
Trump Warns Companies Not Seeking Tariff Refunds
- Tariff Refund Policy: Trump stated he will 'remember' companies that do not seek refunds, implying these firms might receive government support in the future, thereby influencing corporate refund decisions and their relationship with the government.
- Refund System Launch: The U.S. Customs and Border Protection (CBP) launched the CAPE refund processing system on Monday, expected to handle up to $166 billion in refund applications, although payments are not anticipated until 60 to 90 days post-application acceptance.
- Legal Action Dynamics: Major companies like Costco and FedEx have sued the U.S. government to secure timely tariff refunds, while Walmart and Amazon have refrained from litigation, possibly to avoid negative attention from Trump.
- Future Tariff Plans: Trump mentioned that the alternative tariffs being developed could yield higher revenue but will be more complex to implement, with these new tariffs not expected to take effect until July, potentially impacting corporate financial planning.
See More
Three Retail Giants Gain Market Share
- Costco's Profit Growth: Costco's net margin has reached 3%, with membership fees contributing over half of its profits despite only accounting for 2% of revenue, showcasing its resilience and potential for sustained growth amid economic uncertainty.
- Dutch Bros.' Rapid Expansion: Dutch Bros. reported a 29% revenue increase in its latest quarter, alongside a 7.7% rise in comparable-store sales, demonstrating its strong appeal among young consumers and significant market potential yet to be tapped.
- Five Below's Strong Performance: Five Below's net sales surged 24% in the latest quarter, matching Dutch Bros.' growth momentum, indicating that under new CEO Winnie Park, the company is regaining market attention and is poised for continued growth in the coming years.
- Intensifying Market Competition: While these three companies operate in distinct niches, they are all gaining market share in their respective fields, reflecting a rising consumer demand for diverse retail experiences, which may lead to increased competition in the future.
See More
