Walmart and Costco are retail giants generating nearly $1 trillion in revenue combined annually. Walmart focuses on e-commerce and online ads to boost profit margins, while Costco excels in customer retention with high comparable sales growth rates. Both have outperformed the S&P 500, but Walmart’s advertising business and lower valuation make it a better investment choice.

Walmart’s e-commerce sales grew by 25% in Q2, with a 46% improvement in advertising revenue. Costco posted 5.7% same-store sales growth in Q4 FY25, exceeding Walmart’s 4.3% growth. Costco’s international stores outpace U.S. locations in growth, with a 15.6% increase in e-commerce sales.

Investors weighing Walmart and Costco should consider Walmart’s 56% net income growth and lower P/E ratio compared to Costco’s 10.9% net income growth and higher P/E ratio. Walmart’s advertising growth and profitability make it the preferred stock. The Motley Fool recommends exploring other stocks for potential higher returns.

Read more at Nasdaq: Walmart Vs. Costco: Which Retail Stock Is The Better Buy