Published on 14 Jan 2022 on Zacks via Yahoo Finance
Add Costco (COST) as You Reshuffle Your Portfolio for 2022
The year 2022 might be a bit challenging for the stock market, thanks to rising inflation, supply chain bottlenecks and the new Omicron variant that may decelerate the speed of the economic recovery at least in the first half. So, you need to be smart when it comes to investment. The right choice of stock may fetch you higher returns even amid changing market dynamics. We present you with one such stock, Costco Wholesale Corporation COST that looks well-poised, given its sound fundamentals and growth efforts.The tag “all-weather stock” suits Costco as the company has weathered multiple market gyrations and still delivered returns to investors. This operator of membership warehouses has exhibited a decent run on the bourses in the past year. Thanks to its operational initiatives — focus on expanding customer reach, cost optimization and strategic investments — the stock has outpaced both the Zacks Retail - Discount Stores industry and the Retail-Wholesale sector. In the said period, shares of this Zacks Rank #2 (Buy) company have appreciated about 42.7% compared with the industry’s growth of 20.8%. Meanwhile, the sector declined 11.4%.
Key Growth Drivers
Costco has emerged as a viable option for bargain hunters looking for essentials and other discretionary purchases. The company stands to benefit from its ability to draw traffic through strategic pricing along with a robust membership model and increasing penetration of e-commerce business. Cumulatively, these factors have been aiding the company in registering impressive sales numbers.This Issaquah, WA-based company’s net sales increased 16.2% to $22.24 billion for the retail month of December from $19.14 billion in the last year. This followed improvements of 15.7%, 19.2% and 15.8% in November, October and September, respectively. Impressively, comparable sales for the month of December jumped 14.5%. We note that the metric has risen 14.1%, 17.5% and 14.3% in the months of November, October and September, respectively.