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My mom loves Costco
I've heard most Costcos are always crowded, as bargain-hunters pack the company's 536 warehouses to pore through its mostly high-quality bulk and discounted merchandise. Although 392 of those warehouses are in the U.S. and Puerto Rico, the company also has some in Canada, the U.K., Asia, and Mexico.
Costco's customer demographic is resilient, helping its investment thesis in recessionary times. Customers include small business owners, as well as more affluent shoppers. (You've probably noticed how extremely upscale wares sometimes appear at Costco for bargain prices -- it's certainly no Dollar Tree
There are even more reasons why Moms can love this Motley Fool Stock Advisor pick. CEO Jim Sinegal is historically well-known for being a sensible, down-to-earth Foolish leader, sticking to his guns on many issues that would make Moms proud. Not only does Sinegal take a modest base salary and bonus for himself (though stock options do boost the total compensation figure), but his company also treats employees very well, giving them higher-than-industry-standard salaries and health insurance benefits. These perks give Costco enviable retention rates in the retail world.
Unfortunately, Costco's stock doesn't look quite as cheap as its giant drums of mayonnaise. It sports a current price-to-earnings ratio of 27, compared to 18 for Wal-Mart
I think Costco's a solid stock idea for anybody with a long-term horizon, although I certainly understand if frugal investors would prefer to wait for a better price. (That way, you could also tell Mom you actually listened to her when she talked about being careful with money!) All the same, there's something to be said for a company that can continue to excel in our current shaky economy. That's Costco: steady and reliable during thick and thin, just like Mom.