Is Costco a good stock to buy?

Costco offers several key advantages. Its business model is exceptionally strong, the company is consistently profitable, and it has solid growth prospects. The main negative for Costco is its lofty valuation, with shares trading at many times higher than forward earnings. But there's a good case to be made that the stock deserves to trade at a premium because of its track record and resilience.

How much money would you have if you had invested $1,000 in Costco 10 years ago?

In December 2014, Costco stock traded at around $138 per share. An initial investment of $1,000 would be worth nearly $8,500 as of Sept, 22, 2025, with dividends reinvested.

Will Costco stock hit $1,000?

Costco is hovering just below the $1,000 mark at the time of this article update. However, Costco stock briefly went above $1,000 in early 2025 and again in mid-2025.

How to Buy Costco Stock (COST) in 2026

Key Points

Costco stocks can be bought via an online brokerage using simple steps like order type selection.
Investors should note Costco's high valuation and membership-based revenue model.
Costco has a consistent history of profitability and paying dividends, signaling reliability.

It isn't surprising that many individuals are interested in how to invest in Costco Wholesale Corporation (COST -0.31%). After all, the company ranks among the biggest wholesale retailers in the world. The stock has also delivered massive gains since it began trading in 1985.

We'll explain how to buy Costco stock, the pros and cons of investing in the stock, and other key things you need to know about the giant retailer.

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NASDAQ: COST

Costco Wholesale

Today's Change

(-0.31%) $-3.02

Current Price

$979.33

Key Data Points

Market Cap

$436B

Day's Range

$968.38 - $986.61

52wk Range

$844.06 - $1096.50

Volume

45.4K

Avg Vol

Gross Margin

12.88%

Dividend Yield

0.55%

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There are several reasons to seriously consider buying shares of Costco. For example, the company has a strong business moat since it uses a membership-based model. Customers must pay an annual fee to shop in its warehouse stores ($65 for a Gold and $130 for an Executive membership). These fees generate solid recurring revenue for Costco.

The membership model has another big advantage: Customers have ample motivation to shop at Costco to get the best return on investment for their annual fees. And it clearly works, as the company's membership renewal rate is typically around 90%.

The big attraction for customers -- and one of the most important components of Costco's moat -- is its price structure. As the third-largest retailer in the world, Costco is able to negotiate low prices for the products it sells. The more members it gains, the more negotiating power it has.

To be sure, Costco has some challenges. In particular, it faces strong competition from companies like Walmart's (NYSE:WMT) Sam's Club and BJ's Wholesale Club (BJ -0.97%) that use similar business models. Costco also depends heavily on its supply chain. Any disruptions in the distribution of products to its warehouse stores can negatively affect sales.

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Customer shopping in a bulk retail store. — Image source: Getty Images.

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A graphic showing Costco's share price vs income. — undefined

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Artificial intelligence (AI) could also help Costco continue improving its bottom line. AI is transforming the retail industry. Global consulting firm McKinsey & Company predicts that generative AI could deliver between $400 billion and $600 billion in additional value to the retail and consumer packaged goods industries.

Costco is already putting AI to work in its operation by using machine learning to track its fresh food and reduce waste.

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Special Dividend

Unlike a regular dividend, a special dividend is a one-time payment.

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Investing in Costco FAQs

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About the Author

Keith Speights is a contributing Motley Fool healthcare analyst covering publicly traded companies across pharmaceuticals, biotechnology, medical devices, technology, and marijuana. Prior to The Motley Fool, Keith was CEO of Constant Care Technology, a healthcare technology company; vice president of American HealthTech, a healthcare software company; and a director of operations for Blue Cross Blue Shield of Mississippi, a health insurer. He holds a B.S. in Industrial Engineering from Mississippi State University.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.