This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Low Costs Keep COST Growing- Research Report On Costco Wholesale Corporation

NEW YORK, January 24, 2013 /PRNewswire/ --

Membership warehouse club Costco Wholesale Corporation (NASDAQ:COST) [ Full Research Report] (1) posted net sales of $11.21 billion for the month of December 2012 alone, or $34.42 billion for the first 17 weeks of its fiscal year. Inflation in gasoline prices and stronger foreign currencies contributed around 1 percent of the total comparable sales in that same period.

The company was also able to pay out a hefty $7 per share dividend payment last year - though ahead of schedule - fearing a possible tax increase amid the fiscal cliff deal. Fortunately, a compromise was reached between Congress and investors to keep the existing 15 percent dividend rate for most investors. Those who earn more than $400,000 are now at 20 percent.

A report from Investment Contrarians say Costco is a "wonderful example" of consistency and steady price appreciation, with the stock price rising from a respectable $50 in 2010 and upwards of double that in beginning of this year. We can anticipate that to increase further into the next few years, with Thomson Financial estimating sales growth of 7.4 percent and 8.5 percent for the 2013 and 2014 fiscal years.

The company's sales model focuses on selling products at strictly low prices and in high volume without spending "frivolous" expenses on details such as advertising, marketing, and store signs. The goods are delivered virtually at cost to its members, rather Costco's profits are brought in through its membership fees. A Motley Fool report says those fees are only 2 percent of the revenue, but 77 percent of its operating income.

The report adds that there was "no appreciable loss of membership" after Costco raised membership fees by 10 percent in late 2011, meaning it can pass along the savings to members. Also they don't stock as wide a variety of goods like Wal-Mart, nevertheless Costco has great buying power despite being a smaller company.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%
YHOO $27.97 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs