I'm a dividend investor with a value bias, so I tend to shy away from expensive growth stocks. However, owning growing businesses, even if you pay a premium to buy them, can be a very good investment.
Which is why you might want to consider investing in soaring stocks like Costco (COST +1.14%) and Intuitive Surgical (ISRG 2.71%) if your holding time frame is 20 years or longer.
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Costco has a great retail business
Over the past decade, shares of club store retailer Costco have risen by roughly 430%, easily outdistancing the S&P 500 (^GSPC 1.35%) index's rise of approximately 235%. While I'd be more inclined to look at down-and-out Dividend King Target, a retailer with more than five decades of dividend increases behind it and that currently offers a historically high yield, it is hard to suggest that Costco is anything but a great business.
NASDAQ: COST
Key Data Points
The core strength of Costco lies in its ability to leverage membership dues to provide low prices and high-quality service. Membership dues, which have very little cost associated with them, account for roughly 50% of the retailer's operating income. This cash flow gives the company the leeway to accept lower margins from its retail segment, with low prices and a pleasant shopping experience helping to keep customers coming back to the store.
This model isn't likely to change anytime soon. Growth is going to come from opening additional stores, both domestically and abroad. So long as the membership renewal rate remains strong, the business should be on solid ground. The renewal rate was roughly 90% in the fiscal first quarter of 2026. If the last 20 years of growth are any indication, Costco still has a very bright future ahead of it for investors who appreciate growth stocks.
Intuitive Surgical's market is expanding
Intuitive Surgical's da Vinci surgical robot is a leader in its niche within the medical device sector. The stock has risen 825% over the past decade. I would go with Medtronic, which is two years away from Dividend King status, is in the middle of a cost-cutting and streamlining effort, has a historically high dividend yield, and has its own surgical robot. However, Intuitive Surgical is the clear leader when it comes to surgical robotics right now.
Two aspects of Intuitive Surgical's business are worth noting. First, the company continues to sell a lot of new da Vinci robots. In the third quarter of 2025, it placed 427 surgical systems, up from 379 in the same quarter of 2024. The total number of da Vinci systems worldwide increased by 13% year over year, reaching 10,763. However, the number of surgeries using a da Vinci robot rose by 20%. So, not only are the robots themselves in high demand among medical professionals, but consumers seeking out healthcare services want their doctors to use them, too.
This leads to the second major positive aspect of Intuitive Surgical. What amounts to parts and services make up roughly 75% of the company's sales. That is annuity-like income, since the company is basically selling consumable products and supporting its installed base of robots.
NASDAQ: ISRG
Key Data Points
Every new system sold contributes to this flywheel effect. But that's not the only way the company is expanding. It is also gaining approval for new types of surgeries, so there's a hidden growth lever as well.
Notably, the Food and Drug Administration (FDA) just approved the da Vinci system for inguinal hernia repair, cholecystectomies, and appendectomy procedures. If Intuitive Surgical continues to expand both its installed base and the indications for the use of da Vinci systems, it likely has years of growth ahead of it.
The one problem you have to contend with
Costco and Intuitive Surgical are both growth stocks, and they are priced accordingly, with price-to-earnings (P/E) ratios of approximately 46 times and 74 times, respectively. You are paying a premium to own them, noting that the P/E ratio of the S&P 500 index is roughly 28 times. That'll likely be too dear a price for investors like me who have a value bias.
However, if Costco and Intuitive Surgical can continue to grow as they have historically, buying today and holding for 20 years would likely yield a winning investment. The key is to go in knowing that you may have to hold through some painful drawdowns, which growth stocks are prone to experiencing. Intuitive Surgical is recovering from just such a drop, and Costco, which is down 20% from its recent peak, is currently in the middle of one.
