2 Millionaire-Maker Retail Stocks

Core Insights - The article emphasizes the importance of investing in familiar businesses, particularly in the retail sector, which has historically produced significant returns for investors [1] Costco Wholesale - Costco Wholesale has generated a total return of 18,030% over the past 30 years, turning an initial investment of $5,600 in 1994 into $1 million today [2] - The company operates 876 stores globally, with 594 located in the U.S., a significant increase from 221 stores in fiscal 1994 [2] - In the latest fiscal quarter, comparable sales increased by 6.6%, and diluted earnings per share rose by 29% [2] - Membership is a key component of Costco's business model, requiring customers to pay an annual fee of $60, which drives repeat purchases and creates a high-margin revenue stream [3] - The stock has appreciated 219% over the past five years but is currently trading at a high price-to-earnings (P/E) ratio of about 52, suggesting it may be overvalued [3] Home Depot - Home Depot has produced a total return of 6,370% since June 1994, transforming a $15,500 investment into $1 million today [4] - The company operates 2,337 stores, significantly up from 263 stores 30 years ago, and generated $151.8 billion in sales in the trailing 12-month period [4] - Home Depot has maintained an average operating margin of 14.2% over the past decade, supported by supply chain and omnichannel investments [4] - In fiscal 2023, Home Depot returned $8.4 billion in dividends and repurchased $8 billion of outstanding stock, indicating a robust capital return program [5] - The company faced a temporary setback with same-store sales declining by 2.8% in the latest fiscal quarter, but long-term growth prospects remain positive [5][6]