Apple (AAPL 0.11%) is the undisputed leader in the world of consumer technology. Its products and services have fans all over the world.
While not as exciting of a company, Costco (COST +1.12%) is still one of the top businesses in the retail sector. And it has a loyal customer base as well.
Between these two dominant consumer stocks, which one is more deserving of a spot in your portfolio?
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Apple's brand name is key to its success
Apple sells some of the most popular hardware devices in the world, which are recognized for their simple and elegant designs and easy-to-use interfaces. They resonate with consumers, who are always gravitating to the newest updates, like the latest iPhone 17 family. And this strong demand allows the company to flex its pricing power.
What's more, the business develops its own software and services that enable its products. This creates a powerful walled garden, Apple's ecosystem that supports stickiness among its user base. The fact that Apple has thrived for such a long time is indicative of its technological prowess.
There aren't many companies out there that come close to Apple's financial position. The business reported $42.1 billion in net income on $143.8 billion in revenue in Q1 2026 (ended Dec. 27), leading to a robust profit margin of 29%. Free cash flow is always significant, giving management funds to pay dividends and repurchase shares.
NASDAQ: AAPL
Key Data Points
Costco is an all-weather performer
One of Costco's best traits is that it does well in any economic scenario. Same-store sales grew 5.9% in fiscal 2025, then rose 6.4% in Q1 2026 (ended Nov. 23), continuing a positive streak over the years. Even during a global pandemic, inflationary pressures, rising interest rates, and general macro uncertainty, Costco continues to march forward unabated.
That's because it's a favorite shopping destination among consumers. Households pay annual membership fees to visit the company's warehouses, which drives repeat store trips and customer loyalty. The worldwide membership renewal rate was almost 90% in the latest fiscal quarter.
And Costco is able to consistently keep product prices low because of its massive size. It has a limited merchandise assortment compared to supermarket peers, but it buys goods in huge quantities from suppliers. The result is that Costco negotiates favorable terms. And these cost savings are transferred to shoppers, who have come to expect everyday low prices.
NASDAQ: COST
Key Data Points
And the winner is...
Clearly, there are valid arguments for both of these high-quality companies. However, the deciding factor is valuation. And Apple is the more attractive opportunity here.
The tech stock trades at a price-to-earnings ratio of 34.2. That's 34% cheaper than Costco's 51.9 multiple.
