COST (Costco Wholesale Corp) vs S&P 500 Comparison

COST

S&P 500

Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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COST

S&P 500

Difference

1Y 3Y 5Y 10Y 15Y 20Y

COST

S&P 500

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Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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S&P 500

COST

WMT

WALMEX

8267

COL

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1Y 3Y 5Y 10Y 15Y 20Y

Compare the stock's returns with its benchmark index and competitors. Gain insights into its relative performance over time.

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Costco Wholesale Corp
Glance View

Economic Moat

Wide

Market Cap

411.7B USD

Industry

Retail

Costco Wholesale Corp., a titan of the retail industry, emerged from humble beginnings to redefine how consumers experience value shopping. Founded in 1976 by James Sinegal and Jeffrey Brotman, Costco's journey began with a simple yet powerful ethos: to provide quality goods and services at the lowest possible prices. Unlike traditional retailers, Costco operates on a membership-only model, charging customers an annual fee for the privilege of accessing its wide range of products. This membership system generates a steady stream of revenue and fosters a sense of exclusivity among its shoppers, who are greeted with everything from electronics and groceries to luxury goods and vacation packages. The company's vast warehouses, designed for efficiency and cost savings, allow customers to purchase goods in bulk, further enhancing the value proposition. What truly sets Costco apart is its business model, which emphasizes high sales volume and rapid inventory turnover, allowing it to negotiate competitive prices with suppliers. A cornerstone of its success is the razor-thin markup strategy; Costco is known for capping markups on all goods, ensuring that customers find bargains they may not encounter elsewhere. The company's operations extend into ancillary businesses, including gas stations, food courts, and optical centers, each contributing marginally to profits but significantly to customer loyalty and foot traffic. By maintaining a streamlined selection of items—typically favoring high-quality, private-label brands—Costco achieves economies of scale that reinforce its cost leadership. Its dedication to employee satisfaction, with industry-leading wages and benefits, reflects a corporate philosophy that happy employees lead to happy customers, further driving its robust membership renewals and financial stability.

View COST Analysis

COST Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

US		Walmart Inc NYSE:WMT	Add
MX		Wal Mart de Mexico SAB de CV BMV:WALMEX	Add
JP		Aeon Co Ltd TSE:8267	Add
AU		Coles Group Ltd ASX:COL	Add
US		BJ's Wholesale Club Holdings Inc NYSE:BJ	Add
TH	S	Siam Makro PCL SET:MAKRO	Add
FR		Carrefour SA PAR:CA	Add
US		PriceSmart Inc NASDAQ:PSMT	Add
SA		Abdullah Al Othaim Markets CompanySJSC SAU:4001	Add
MX		Organizacion Soriana SAB de CV BMV:SORIANAB	Add

US		Walmart Inc NYSE:WMT	Select
MX		Wal Mart de Mexico SAB de CV BMV:WALMEX	Select
JP		Aeon Co Ltd TSE:8267	Select
AU		Coles Group Ltd ASX:COL	Select
US		BJ's Wholesale Club Holdings Inc NYSE:BJ	Select
TH	S	Siam Makro PCL SET:MAKRO	Select
FR		Carrefour SA PAR:CA	Select
US		PriceSmart Inc NASDAQ:PSMT	Select
SA		Abdullah Al Othaim Markets CompanySJSC SAU:4001	Select
MX		Organizacion Soriana SAB de CV BMV:SORIANAB	Select

US		Walmart Inc NYSE:WMT	Add
MX		Wal Mart de Mexico SAB de CV BMV:WALMEX	Add
JP		Aeon Co Ltd TSE:8267	Add
AU		Coles Group Ltd ASX:COL	Add
US		BJ's Wholesale Club Holdings Inc NYSE:BJ	Add
TH	S	Siam Makro PCL SET:MAKRO	Add
FR		Carrefour SA PAR:CA	Add
US		PriceSmart Inc NASDAQ:PSMT	Add
SA		Abdullah Al Othaim Markets CompanySJSC SAU:4001	Add
MX		Organizacion Soriana SAB de CV BMV:SORIANAB	Add

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COST

vs

S&P 500

Stocks Performance
COST vs S&P 500

Performance Gap
COST vs S&P 500

Performance By Year
COST vs S&P 500

Competitors Performance
Costco Wholesale Corp vs Peers

Costco Wholesale Corp
Glance View

Company

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COST vs S&P 500

Stocks Performance COST vs S&P 500

Performance Gap COST vs S&P 500

Performance By Year COST vs S&P 500

Competitors Performance Costco Wholesale Corp vs Peers

Costco Wholesale Corp Glance View

Company

Help

Tools

Stocks

COST

vs

S&P 500

Stocks Performance
COST vs S&P 500

Performance Gap
COST vs S&P 500

Performance By Year
COST vs S&P 500

Competitors Performance
Costco Wholesale Corp vs Peers

Costco Wholesale Corp
Glance View