How to buy Costco shares
Own Costco shares in just a few minutes.
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Costco Wholesale Corporation is a discount stores business with stocks listed in the US. Costco shares (COST) are listed on the NASDAQ and all prices are listed in US Dollars. Its last market close was US$333.9 – a decrease of 5.88% over the previous week. Here's how to invest if you're based in Australia.
How to buy shares in Costco
- Compare share trading platforms. To buy shares in a US company from Australia you'll need to find a trading platform that offers access to US stock markets. If you're just starting out, look for a platform with low brokerage and foreign exchange fees.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and tax file number. Fund your account with a bank transfer, credit card or debit card.
- Search for Costco. Find the share by name or ticker symbol: COST. Research its history to confirm it's a solid investment against your financial goals.
- Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until Costco reaches your desired price. To spread out your risk, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. At last close price of US$333.9, weigh your budget against a diversified portfolio that can minimise risk through the market's ups and downs. You may be able to buy a fractional share of Costco, depending on your broker.
- Check in on your investment. Congratulations, you own a part of Costco. Optimise your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
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What's in this guide?
- Costco key stats
- Compare share trading platforms
- Is Costco stock a buy or sell?
- Costco performance over time
- Can I short Costco shares?
- Is Costco suitable for ethical investing?
- Are Costco shares over-valued?
- Costco's financials
- How volatile are Costco shares?
- Does Costco pay a dividend?
- Have Costco shares ever split?
- Other common questions
Costco share priceUse our graph to track the performance of COST stocks over time.
Costco shares at a glance
|52-week range||US$267.0543 - US$387.3052|
|50-day moving average||US$354.4097|
|200-day moving average||US$361.9844|
|Dividend yield||US$2.75 (0.83%)|
|Earnings per share (TTM)||US$9.74|
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Is it a good time to buy Costco stock?
The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
Costco price performance over time
|1 week (2021-02-26)||0.88%|
|1 month (2021-02-08)||-7.21%|
|3 months (2020-12-07)||-10.56%|
|6 months (2020-09-04)||-3.66%|
|1 year (2020-03-06)||7.25%|
|2 years (2019-03-07)||54.02%|
|3 years (2018-03-07)||78.21%|
|5 years (2016-03-07)||125.35%|
Is Costco under- or over-valued?
Valuing Costco stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Costco's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Costco's P/E ratio
Costco's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 34x. In other words, Costco shares trade at around 34x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
Costco's PEG ratio
Costco's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 3.5357. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Costco's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
Costco's EBITDA (earnings before interest, taxes, depreciation and amortisation) is US$8.1 billion (£5.8 billion).
The EBITDA is a measure of a Costco's overall financial performance and is widely used to measure a its profitability.
|Revenue TTM||US$172.9 billion|
|Operating margin TTM||3.7%|
|Gross profit TTM||US$21.9 billion|
|Return on assets TTM||7.16%|
|Return on equity TTM||27.81%|
|Market capitalisation||US$145.5 billion|
TTM: trailing 12 months
Shorting Costco shares
There are currently 4.3 million Costco shares held short by investors – that's known as Costco's "short interest". This figure is 19.4% up from 3.6 million last month.
There are a few different ways that this level of interest in shorting Costco shares can be evaluated.
Costco's "short interest ratio" (SIR)
Costco's "short interest ratio" (SIR) is the quantity of Costco shares currently shorted divided by the average quantity of Costco shares traded daily (recently around 2.4 million). Costco's SIR currently stands at 1.79. In other words for every 100,000 Costco shares traded daily on the market, roughly 1790 shares are currently held short.
However Costco's short interest can also be evaluated against the total number of Costco shares, or, against the total number of tradable Costco shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case Costco's short interest could be expressed as 0.01% of the outstanding shares (for every 100,000 Costco shares in existence, roughly 10 shares are currently held short) or 0.0098% of the tradable shares (for every 100,000 tradable Costco shares, roughly 10 shares are currently held short).
Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against Costco.
Find out more about how you can short Costco stock.
Costco's environmental, social and governance track record
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Costco.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Costco's total ESG risk score
Total ESG risk: 24.32
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Costco's overall score of 24.32 (as at 01/01/2019) is pretty good – landing it in it in the 30th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Costco is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
Costco's environmental score
Environmental score: 4.18/100
Costco's environmental score of 4.18 puts it squarely in the 3rd percentile of companies rated in the same sector. This could suggest that Costco is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Costco's social score
Social score: 11.94/100
Costco's social score of 11.94 puts it squarely in the 3rd percentile of companies rated in the same sector. This could suggest that Costco is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Costco's governance score
Governance score: 8.2/100
Costco's governance score puts it squarely in the 3rd percentile of companies rated in the same sector. That could suggest that Costco is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Costco's controversy score
Controversy score: 3/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. Costco scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that Costco hasn't always managed to keep its nose clean.
Environmental, social, and governance (ESG) summary
|Total ESG score||24.32|
|Total ESG percentile||30.2|
|Environmental score percentile||3|
|Social score percentile||3|
|Governance score percentile||3|
|Level of controversy||3|
Costco share dividends
Dividend payout ratio: 121.12% of net profits
Recently Costco has paid out, on average, around 121.12% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 0.84% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Costco shareholders could enjoy a 0.84% return on their shares, in the form of dividend payments. In Costco's case, that would currently equate to about $2.75 per share.
Costco's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
Costco's most recent dividend payout was on 19 February 2021. The latest dividend was paid out to all shareholders who bought their shares by 4 February 2021 (the "ex-dividend date").
Have Costco's shares ever split?
Costco's shares were split on a 2:1 basis on 14 January 2000. So if you had owned 1 share the day before before the split, the next day you'd have owned 2 shares. This wouldn't directly have changed the overall worth of your Costco shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for Costco shares which in turn could have impacted Costco's share price.
Costco share price volatility
Over the last 12 months, Costco's shares have ranged in value from as little as US$267.0543 up to US$387.3052. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NASDAQ average) beta is 1, while Costco's is 0.6478. This would suggest that Costco's shares are less volatile than average (for this exchange).
Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories. The company provides dry and packaged foods, and groceries; snack foods, candies, alcoholic and nonalcoholic beverages, and cleaning supplies; appliances, electronics, health and beauty aids, hardware, and garden and patio products; meat, bakery, and deli products, as well as produce; and apparel and small appliances. It also operates pharmacies, optical dispensing centers, food courts, and hearing-aid centers, as well as 615 gas stations; and offers business delivery, travel, same-day grocery, and various other services online in various countries. As of October 07, 2020, the company operated 796 warehouses, including 552 in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in South Korea, 13 in Taiwan, 12 in Australia, 3 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.
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