Costco Wholesale Corporation (COST): A Wholesaler for Your Long-Term Portfolio

At $110 per share, Costco is worth around $47.90 billion. The market values Costco at 11.6 times EV/EBITDA. Costco has the highest valuation compared to Target and Wal-Mart. Wal-Mart is trading at around $74.80 per share, with the total market cap of $247 billion. The market values Wal-Mart at 8.1 times EV/EBITDA. Target has the cheapest valuation. At $69.50 per share, Target is worth $44.60 billion on the market. It is valued at only 7.46 times EV/EBITDA. Income investors might like Wal-Mart the best with its highest dividend yield at 2.5%, while the dividend yields of Target and Costco are lower, at 2.1% and 1.1%, respectively.

My Foolish take

Costco, even with the highest valuation, is still a great stock for investors in the long run. It might experience short-term set backs from time to time in the future but investors could do well by just sticking to it, as Warren Buffett said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool owns shares of Costco Wholesale.

The article A Wholesaler for Your Long-Term Portfolio originally appeared on Fool.com and is written by Anh HOANG.

Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.