"Costco Wholesale ( NASDAQ:COST ) has long been a terrific investment, delivering superior returns no matter when you bought the stock. Whether you bought shares a year ago, a decade back, or even at the turn of the millennium, the stock's consistent outperformance stems from its membership-driven model that fosters loyalty and steady revenue. Beyond share price gains that often double the broader market, Costco has rewarded investors through reliable dividends."
"Despite its phenomenal success, Costco's shares have faltered in 2025, down more than 2% year-to-date while the S&P 500 has surged 17%. This marks one of the stock's worst performances against the index in over two decades - it hasn't performed so poorly since 2002. The divergence underscores a change: after a blistering 39% gain in 2024 (compared to a 25% gain by the benchmark index), Costco entered the year with sky-high expectations,"
Costco's membership-driven model creates loyalty and steady revenue, supporting long-term share outperformance and reliable dividend increases over 21 years. The company has periodically paid hefty special dividends that have accelerated total shareholder returns. Fiscal 2025 showed revenue growth but slowing comparable-store sales, with fourth-quarter revenue up 8% and comp sales growth easing to 5.8%, while November comp growth dipped to 6.9% company-wide. High expectations followed a 39% 2024 gain, leaving Costco trading above a price-to-earnings ratio of 50 entering 2025. Analysts cite inflation-weary consumers and a membership fee increase that raised Gold Star by $5 and Executive by $10 as headwinds.
Read at 24/7 Wall St.
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