3 Reasons Costco Is a Must-Buy for Long-Term Investors

Group 1: Company Overview - Costco is a strong investment option due to its consistent business performance and high membership renewal rate of 93% in the U.S. market, indicating customer loyalty [2][3] - The majority of Costco's profits come from membership fees rather than product sales, allowing for steadier annual earnings compared to traditional retailers [3] Group 2: Competitive Position - Costco's comparable-store sales increased by 9% in the last quarter, outperforming competitors like Target (2%) and Walmart (5%) [4] - The company's e-commerce revenue, which includes discretionary products, grew by 22% last quarter, showcasing its ability to thrive in various market conditions [5] Group 3: Valuation and Investment Appeal - Costco shares are trading at over 50 times earnings, indicating a premium valuation compared to Walmart's P/E ratio of 36 and Target's 0.5 times sales [6] - Despite a lower dividend yield compared to Walmart, Costco is expected to deliver market-beating returns as it continues to gain market share and expand into new growth areas [7][8]