Costco Wholesale Corporation (COST): Should You Buy this Retailer?

The company has also realized the potential of the e-commerce sector working through its revamped website Costco.com and its applications for mobile devices. Costco offers distinct products in its stores and on its e-commerce platform to keep its customers interested and avoid overlapping among the distinct channels. The company is also betting heavily on its private label brands which have been a major driving force in its sales. It promotes these brands as cheaper alternatives to the other more established ones.

The warehouse retail sector has been growing with the reduced spending power of consumers and their increasing bargaining tendency. This explains the persistent climb in Costco’s share prices. The shares have risen 194% over the past ten years to reach $110 a share. Costco has a price-to-earnings ratio that is sufficiently larger than its peers and might seem overpriced at a glance. Given its extensive business plans, excellent competitive position, stellar past numbers and analysts’ positive outlook, however, the company’s stock promises steady returns. The expanding sector puts the company in a commanding position, offering a nice investment opportunity.

ROUNAK KHEMKA has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale (NASDAQ:COST). The Motley Fool owns shares of Costco Wholesale.

The article Should You Buy this Retailer? originally appeared on Fool.com and is written by ROUNAK KHEMKA.

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

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