Grocery retailer Costco Wholesale Corporation (NASDAQ:COST) continues to be a top pick of mine for Canadian income-oriented investors, for a number of reasons. This retailer has a durable competitive advantage in its sector that is unparalleled, in my view.
The company has a number of growth opportunities globally to take advantage of, and is one of the best among its competitive set. I believe this dynamic is unlikely to change over time, and I do think the rapid stock price increase Costco investors have seen is warranted.
For those who may have missed out on the buying opportunity that was the pandemic, I do think that more upside is still on the table for this retailer. Growth in the company’s digital realm is intriguing, as is the company’s membership renewal rate which currently sits around 90%. With profitability largely tied to membership sales, this is a key metric investors ought to keep an eye on.
The value preposition offered by Costco is rock-solid, and the high level of customer loyalty displayed by millions of members is impressive. Investors looking for a long-term core portfolio staple ought to consider companies like Costco with such impressive metrics.
The dividend offered by Costco has declined markedly in recent months due primarily to the company’s impressive stock price appreciation, but still sits at roughly 4%. This is a very attractive dividend relative to other options in the 4% range with less impressive growth opportunities.
Invest wisely, my friends.
