The Best Stock to Invest $1,000 in Right Now
Key Points
Costco posted double-digit comps growth for its latest monthly update. It reports again this week.
The warehouse club operator is a 150-bagger since going public in 1993.
Why now? The stock is actually trading slightly lower over the past year despite its impressive track record of growth.
- 10 stocks we like better than Costco Wholesale ›
Even if it means buying just a single share, it's hard to find a better stock to own right now than Costco (NASDAQ: COST). The country's leading warehouse club operator has historically been an all-weather performer. Despite charging annual membership fees, Costco's ability to deliver value to shoppers with meager mark-ups on essentials keeps them close.
Costco's stunning 13.7% jump in comps for May shows its resilience. It will report June's performance on Wednesday of this week. Shoppers know that $1,000 goes a long way at Costco. It could be time for investors to see things the same way.
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Everything counts in large amounts
Float any pessimistic market scenario. Inflation? Recession? Costco should weather the storm better than most retail investments. Its 82.9 million paid memberships will keep shopping, and growing in number.
One can argue that the stock isn't cheap. It's trading for 42 times next year's analyst profit target. Here's the twist: Costco is cheaper than it's been in some time. Costco stock is actually trading lower over the past year. It's just a 3% dip, but still a decline in an otherwise rising market.
The business keeps growing. Revenue in its latest fiscal quarter -- ending just as May was starting to heat up -- rose 9%. Margins widened, with net income climbing 13%. Growth is the default setting here. Costco has had just one year of negative sales growth in more than three decades of trading.
You will pay a premium to own safe stocks like Costco. This one is worth it. With its trailing P/E multiple at a two-year low, this is a good time to consider warming up to a perpetual market beater that's a 150-bagger since going public 33 years ago. You don't even have to be a Costco member to own a piece of the company. Interested in finding a resilient retailer? Join the club.
Should you buy stock in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
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Rick Munarriz has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
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