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

Options: Why Buy Puts? To Make Money When You Think a Stock Will Fall in Price

Beginning options investors often struggle with the concept of put options. They have no trouble with call options. With calls, beginners usually grasp that you will buy a predetermined number

Bitcoin Zooming Higher Again. Speculation or the Future of Money?

As Bitcoin threatens to break through its record highs set a few years ago, at least some people are likely to get involved in speculating in them again. Many seem

5 Proven Ways to Earn Powerful Side Income

If you want to earn extra money with relative ease, whether it is to save up for retirement or prepare for a well-deserved vacation, one of the best things you

zto

Day Trading Now: Stock Too Expensive? Buy a Slice

The cost to build a diversified stock portfolio is often the highest barrier for new investors. The outlay required to buy a basket stocks is more than the dollars available.

Looking for Better Returns? 5 Ways to Invest in Brazil

Brazil is known for tourist attractions, its natural beauty and soccer. The former Portuguese colony is also a thriving multicultural country — a melting pot not unlike the United States.

Add Some Spice to Your Portfolio with This Consumer Staple Stock

When the vaccine results from Pfizer (PFE) were announced on November 9, it sent the stock market on a wild ride. Sectors that had been underperforming the overall market screamed

Iaccino: Market Volatility Here to Stay

Bob Iaccino, editor of the Stock Think Tank, talks about Amazon's move into prescription drugs and market volatility on Bloomberg News.

Beat the system by understanding both sides of the trade, reward and risk. Get Bob Iaccino's Stock Think Tank newsletter through this special offer.

Are Cannabis Stocks a Good Investment for 2021?

Cannabis and CBD oils are booming industries.  Economies see a massive boost of billions of dollars when these two hit the scene. From recreational to medicinal, these plants offer a

The Benefits and Pitfalls of Trading Options on ETFs

An exchange-traded fund (ETF) is a collection of assets that track specific investment categories. For instance, SPY tracks the S&P 500. ETFs can also track sectors and industries, such as

Options Strategy: Sell Covered Calls on Technology Stocks

Stock prices of publicly traded technology companies have been resilient this year. Many remained unaffected or benefited from the onset of the current crisis. Other sectors seem more exposed to

Looking for Foreign Stocks with Powerful Dividends? Look No More! (VYMI)

Declining yields on investment income products has let investors to hunt for high dividend yielding stocks to boost their income. One product that I have actively used and would like

Frazier: How I Got a 45.2% Gain in Less Than 60 Days

Click Here To Subscribe On A 100% Free-Trial Basis To The Bulletproof Wealth Report!

Hello David Frazier here, editor of the Bulletproof Wealth Report. I told subscribers to our Bulletproof Wealth Report on November 2nd that I expected U.S. stock prices