PriceSmart, Inc. (PSMT), Costco Wholesale Corporation (COST): A Good Membership Warehouse Club Operator in Latin American Market

Although PriceSmart has been consistently growing, it still affords to pay its shareholders decent dividends. In 2012, it paid out around $0.60 per share in dividends, accounted for only 26.8% of its earnings in 2012. At the current trading price, its dividend yield stays at 0.7%. Costco Wholesale Corporation (NASDAQ:COST)’s dividend yield is a bit higher. At $110.60 per share, Costco is worth around $48.3 billion on the market. The market values Costco at 21.9 times its forward earnings. Costco’s dividend yield is 1.1%. Wal-Mart Stores, Inc. (NYSE:WMT) is trading at $76.40 per share, with the total market cap of around $252 billion. The market values Wal-Mart the cheapest among the three, at only 13.2 times its forward earnings. Income investors might prefer Wal-Mart with its dividend yield at 2.5%.

A better buy than Costco and Wal-Mart?

Charlie Munger has been in love with Costco, and he has said that Costco would be the place that we and our families would go for the rest of our lives. Going forward, all of those companies would deliver decent returns for their shareholders in a long run, as they all have leading positions in the markets they serve and deliver nice operating performance. Personally, PriceSmart would benefit a lot from the growing Latin American market. It could also be a good acquisition target for either Wal-Mart or Costco to expand their footprints in Latin America.

The article A Good Membership Warehouse Club Operator in Latin American Market originally appeared on Fool.com.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale (NASDAQ:COST) and PriceSmart. The Motley Fool owns shares of Costco Wholesale. Anh 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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