Here's How Much a $1000 Investment in Costco Made 10 Years Ago Would Be Worth Today

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Costco (COST) ten years ago? It may not have been easy to hold on to COST for all that time, but if you did, how much would your investment be worth today?

Costco's Business In-Depth

With that in mind, let's take a look at Costco's main business drivers.

Based in Issaquah, Washington, Costco Wholesale Corporation sells high volumes of foods and general merchandise (including household products and appliances) at discounted prices through membership warehouses. It is one of the largest warehouse club operators in the United States. The company also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.

The company’s warehouses offer an array of low-priced nationally branded and select private labeled products in a wide range of merchandise categories. Costco offers three types of memberships to its customers: Business, Gold Star (individual), and Executive.

As of Mar 3, 2022, Costco operates 828 warehouses, including 572 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, and two each in France and China, and one in Iceland.

Costco generates revenue from two sources: 1) Store sales (Net sales; 98% of fiscal 2021 total revenue) and 2) Membership fees (MFI; 2% of fiscal 2021 total revenue).

Costco offers myriad varieties of food products as well as a vast range of household and lifestyle products, stationeries and appliances. The company also sells gasoline to customers at cheap prices and offers merchandise in the following categories:

Food and Sundries (including dry foods, packaged foods, groceries, snack foods, candy, alcoholic and nonalcoholic beverages, and
cleaning supplies)

Hardlines (including major appliances, electronics, health and beauty aids, hardware, and garden and patio)

Fresh Foods (including meat, produce, deli, and bakery)

Softlines (including apparel and small appliances)

Ancillary (including gasoline and pharmacy businesses).

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Costco ten years ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in March 2012 would be worth $5,929.59, or a 492.96% gain, as of March 16, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 203.90% and the price of gold went up 10.91% over the same time frame.

Analysts are forecasting more upside for COST too.

Shares of Costco have increased and outpaced the industry in the past six months. The company’s growth strategies, better price management, decent membership trend and increasing penetration of e-commerce business reinforce its position. The strategy to sell products at discounted prices has helped draw customers seeking both value and convenience. These factors have been aiding in registering impressive sales and earnings numbers. Costco put up a decent performance in second-quarter fiscal 2022, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Also, Costco has been witnessing stellar comps sales run. While aforementioned factors raise optimism, supply chain bottlenecks and higher labor and freight costs remain concerns. Any deleverage in SG&A rate may hurt margins.

The stock is up 5.53% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 10 higher, for fiscal 2022. The consensus estimate has moved up as well.
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