11 Best Counter Cyclical Stocks to Buy According to Analysts

4. Costco Wholesale Corporation (NASDAQ:COST)

Average Upside Potential: 13.07%

Number of Hedge Fund Holders: 96

​​Costco Wholesale Corporation (NASDAQ:COST) is a leading global retailer operating membership-only warehouse clubs that offer a wide range of products at competitive prices. Its extensive product categories include groceries, electronics, appliances, apparel, and home goods, with a focus on high-quality national and private-label brands like Kirkland Signature. COST maintains a significant international presence with warehouses in countries such as Canada, Mexico, the United Kingdom, Japan, South Korea, and Australia. The company’s counter cyclical element of the business lies in its ability to attract cost-conscious consumers during economic downturns, as its bulk pricing and value offerings become increasingly appealing.

Costco Wholesale Corporation (NASDAQ:COST) reported strong second quarter results for fiscal 2025, with net income reaching $1.788 billion, or $4.02 per diluted share. This reflects an 8.4% increase when excluding certain tax-related items. Net sales rose 9.1% YoY to $62.53 billion, while comparable sales grew by 6.8%, or 9.1% after adjusting for fuel prices and currency effects. Membership metrics remained solid, with a 93% renewal rate in the US and Canada. Paid household memberships increased 6.8% to 78.4 million, and Executive Memberships saw a 9.1% rise, now making up 47.1% of all paid members and generating 73.8% of worldwide sales.

On the operational side, Costco Wholesale Corporation (NASDAQ:COST) achieved modest margin improvements, with gross margin rising to 10.85% and SG&A costs declining to 9.06%. Non-foods led merchandising growth, especially in categories such as gold, jewelry, gift cards, toys, housewares, and sporting goods. Fresh foods posted high single-digit gains, while food and sundries delivered low to mid-single-digit growth. Looking ahead, management plans to open 28 warehouses in fiscal 2025, with 25 being net new sites after accounting for relocations. Despite potential pressures from foreign exchange and tariffs, the company intends to rely on its global purchasing power and supplier partnerships to help offset cost increases for members. COST is one of the best counter cyclical stocks to buy as it has consistently outperformed the market in all economic cycles in the last 20 years.