The Dividend Stock That Belongs in Every Portfolio

costco cost

If you are like me, then you are always looking for great companies that are on sale.

What makes the company a bonus buy is when it also pays a dividend.

Costco Wholesale Corporation (COST) is one of those stocks for me that I have had my eye on for a long time.

It has been on my watchlist and I am just waiting for it to come down to the price I feel confident about so I can jump in at a comfortable margin of safety price.

Unfortunately, most stocks have reached all-time highs since the market crashed hard in March, and COST is no exception.

COST has been on a tear the past several months and it appears they won’t be slowing down anytime soon.

Now, with all that being said, I still believe COST can add great value to your portfolio due to its strong balance sheet, low debt, and increasing dividend.

First off, for anyone who doesn’t know what COST does, they are a wholesale members-only retail chain.

COST sells everything from food, electronics, to even clothes. They are famous, too, for a $1.50 hotdog and a soda deal that hasn’t changed in price in decades.

What makes them so appealing to so many people is the fact that COST sells in bulk which allows their members to get larger quantities of items at a better price point than other stores.

COST by the numbers

Over the last ten years, COST has increased its earnings per share growth (EPS) by 13.86%.

Operating cash per share (OCPS) has increased by 13.42%, and sales growth has remained steady averaging 7.42%.

Return on equity (ROE) has averaged 22.36% and return on invested capital (ROIC) has averaged 15.84%.

COST has also managed to increase its dividend year after year, which tells me that they are keeping their debt low, cash high, and the investors in mind.

The current dividend stands at $0.70 per share paid quarterly, which comes out to $2.80 per share yearly.

Although this number does bring a high yield, it is still a solid number from a solid company.

Now that is the kind of business I can invest in.

For me, the only current downside is where COST has been trading at the past couple of months.

The share price has been consistently over $300 since the end of June and has even hit all-time highs during this pandemic.

Since COST has managed to continue sales growth and cash on hand while so many other businesses are struggling to keep their doors open.

I would venture to think that COST isn’t going to get any cheaper over the next several months.

With that being said, one Yahoo Finance analyst has COST currently as a buy with a one year estimated target price of $352.52.

If you are willing to trust the numbers and have some extra cash on hand, I would highly suggest giving this wonderful company some consideration.

Recommended Articles

Delaying Retirement Can Potentially Delay Dementia

They say that retirement should be viewed as a new life adventure. But it is really a budgeting lifestyle for post-working life. And there are a lot of considerations to

Attention Ladies: These Herbs Are Important to Your Health

Women have so many demands on their bodies and minds that any relief is a blessing. That is why you need to start taking these herbs to help increase your

4 Rules That Will Bombproof Your Retirement

Financial markets often are directly correlated to the macroeconomic, social and political factors far out of our control. Herds of investors are prone to reacting in extremes whenever these macro

4 Types of Retirement Income That Will Be Taxed

As well all know, expenses may change from one year to the next, and the amount you spend may change throughout retirement as well. That's why, for many current and

Study Finds Risks of Two Commonly Taken Antidepressants

Depression is a serious mental illness — one that affects more than 15 million adults in the U.S. For some women, pregnancy can bring about new depression symptoms, or worsen

Live Near Water? You Probably Paid Too Much for Your House. Here’s Why (Map)

Even a cynic recognizes that opportunity is a key to prudent business timing. Consider home buying. If you’re in the market for a new home, and are informed and discerning

3 Reasons to Should Avoid Life Settlement Policies

Most Americans don’t take life insurance for granted because almost one out of every two Americans don’t have it. According to the Insurance Information Institute, only about 54% of Americans

Feeling Hangry? How to Avoid Food-Related Mood Swings

Food that you eat is processed into simple sugars, free fatty acids and amino acids. The nutrients are moved into the bloodstream where they are assimilated by organs, tissues, and

How to Put Your Investments On Autopilot — and Win

Are you committed to investing a part of your monthly income towards retirement? You can insulate your financial future against unforeseen emergencies and economic risks if you use an automatic

Best Time to Sell or Buy a Home? It Depends…

When's the best time to buy or sell a home? That's a great question. A lot depends on who you are, seller or buyer. Traditionally, the best time of year

6 Sneaky Habits That May Be Causing Your Overeating

Overeating? Many people vastly underestimate how many calories they consume in a day. Even if you believe you restrict your daily calorie consumption, you may be consuming more calories than

How Shark Tank Judge Barbara Corcoran Nearly Lost $400,000 — Just by Reading an Email

According to a 2017 FBI Internet Crime Report, individuals and companies lost over $5.5 billion between 2013 through 2017 due to email phishing scams. Email phishing scams are deceptive emails