COST vs. WMT, PSMT, TGT, DG, DLTR, BJ, OLLI, MNSO, FIVE, and EXTO
Should you be buying Costco Wholesale stock or one of its competitors? The main competitors of Costco Wholesale include Walmart (WMT), PriceSmart (PSMT), Target (TGT), Dollar General (DG), Dollar Tree (DLTR), BJ's Wholesale Club (BJ), Ollie's Bargain Outlet (OLLI), MINISO Group (MNSO), Five Below (FIVE), and Almacenes Éxito (EXTO). These companies are all part of the "variety stores" industry.
Walmart (NYSE:WMT) and Costco Wholesale (NASDAQ:COST) are both large-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, community ranking, profitability, institutional ownership, valuation, dividends, risk, media sentiment and earnings.
Walmart has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Costco Wholesale has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.
Walmart has higher revenue and earnings than Costco Wholesale. Walmart is trading at a lower price-to-earnings ratio than Costco Wholesale, indicating that it is currently the more affordable of the two stocks.
Walmart pays an annual dividend of $0.83 per share and has a dividend yield of 1.2%. Costco Wholesale pays an annual dividend of $4.64 per share and has a dividend yield of 0.6%. Walmart pays out 35.5% of its earnings in the form of a dividend. Costco Wholesale pays out 28.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Walmart has raised its dividend for 52 consecutive years and Costco Wholesale has raised its dividend for 21 consecutive years. Walmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
In the previous week, Walmart had 26 more articles in the media than Costco Wholesale. MarketBeat recorded 64 mentions for Walmart and 38 mentions for Costco Wholesale. Walmart's average media sentiment score of 0.60 beat Costco Wholesale's score of 0.50 indicating that Costco Wholesale is being referred to more favorably in the news media.
Walmart currently has a consensus target price of $71.60, indicating a potential upside of 2.60%. Costco Wholesale has a consensus target price of $799.33, indicating a potential downside of 2.23%. Given Costco Wholesale's stronger consensus rating and higher possible upside, equities research analysts clearly believe Walmart is more favorable than Costco Wholesale.
Walmart has a net margin of 2.88% compared to Walmart's net margin of 2.83%. Walmart's return on equity of 30.02% beat Costco Wholesale's return on equity.
Costco Wholesale received 324 more outperform votes than Walmart when rated by MarketBeat users. Likewise, 72.03% of users gave Costco Wholesale an outperform vote while only 60.60% of users gave Walmart an outperform vote.
26.8% of Walmart shares are held by institutional investors. Comparatively, 68.5% of Costco Wholesale shares are held by institutional investors. 45.6% of Walmart shares are held by insiders. Comparatively, 0.2% of Costco Wholesale shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Summary
Costco Wholesale beats Walmart on 11 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding COST and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NASDAQ and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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