2024-04-14 22:24:42 ET
Summary
- Costco continues to grow at a stable place, adding new retail locations domestically and internationally. The new Shanghai location was well received with customers lined up outside the door.
- Costco has the potential to take on additional appliance market share with their low-cost deals and same-day delivery.
- Management increased their quarterly dividend to $1.16/share with a CAGR of 13%. The firm also repurchased $159mm in stock in q2'24.
Costco ( COST ) continues to grow at an exceptional rate as the firm continues to add new retail locations, both domestic and international. The firm has shown strength in adding new stores, even when located within regions with existing locations. This growth has allowed management to increase shareholder value through both dividends and buybacks, increasing the quarterly dividend to $1.16/share. I believe that Costco has a significant edge in growing their international retail footprint as their new Shanghai location was met with exceptionally strong reception. The firm is also hitting the pavement in expanding their eCommerce platform with improved y/y sales of 18.2% within the segment. Though COST shares trade at a significant premium at 30.14x TTM EV/EBITDA, I believe the firm’s operational excellence and consistent growth justifies this high premium. I rate COST shares with a BUY recommendation with a price target of $760/share....
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Costco Is The Constant Grower Your Portfolio Needs