From Yahoo Finance: 2025-04-26 09:10:00

Investors are astounded by a dominant business that has achieved a spectacular total return of 22,000% in the past 40 years. A $10,000 investment made in 1985 would now be worth $2.2 billion, showing a 14.4% annualized gain. This monster stock is none other than Costco (NASDAQ: COST), which has a strong track record of growth and success.

Costco operates 897 locations globally and has seen significant growth from just 221 stores in 1994. With a focus on quality merchandise at affordable prices, the company has expanded to 13 countries outside the U.S. Costco’s durable demand is evident with same-store sales increasing by 6.8% in Q2, showing consistent consumer favoritism.

The company’s net income has seen steady gains, with diluted earnings per share growing by 11.6% annually in the past 20 years. Analysts expect this figure to continue growing by 11.1% yearly between fiscal 2024 and 2027. Despite the competitive retail industry, Costco’s competitive strengths and buying leverage have supported its success.

Costco’s emphasis on customer satisfaction has built a strong brand presence, leading to a 6.8% increase in membership households. The company’s worldwide renewal rate is an impressive 90.5%, showcasing strong customer loyalty. While the stock is currently down 9% from its peak, investors should consider the high valuation before buying shares.

The market recognizes Costco’s excellence, with a price-to-earnings ratio of 57, indicating a steep valuation. While the stock has a remarkable track record, the high starting valuation may hinder future returns. Investors may want to hold off on buying shares at this time.

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Read more at Yahoo Finance: 1 Monster Stock That Turned $10,000 Into $2.2 Million