Walmart vs. Costco: Which Retailer Stock Is Right for You?

Find out which of these box stores is the better investment.

As Sears files for bankruptcy and stock in Amazon is caught up in a major downswing, both the future and the past of American retail is struggling at the moment. Given that online sales still represent less than 10 percent of total retail sales, however, plenty of investors might be wondering which old-school box store is the better investment.

So, here’s a look at two of the biggest players in the market: the world’s biggest retailer, Walmart (WMT), versus the poster child for buying in bulk, Costco (COST).

Click to find out how much the 100 top-selling retail stores in the U.S. earn.

Walmart vs. Costco Stock Comparison

Here’s a basic comparison of Walmart and Costco stocks:

Walmart Costco
Share Price $93.82 $224.51
Market Cap $274.8 billion $98.4 billion
2018 Revenue* $500.3 billion $141.6 billion
2018 Profits* $9.9 billion $3.1 billion
2018 Revenue Growth* 3% 9.7%
2018 Profit Growth* -27.7% 17%
GOBankingRates’ Evaluation $389.2 billion $91.6 billion
P/E Ratio 53.67 31.67
P/S Ratio 0.54 0.69
Stock Gain/Loss Last Month -0.8% -4.6%
Stock Gain/Loss Last Year 10.9% 42%
*Walmart’s 2018 fiscal year ended on Jan. 31, 2018; Costco’s ended on Sept. 2, 2018.
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Why You Might Pick Walmart Stock:

  • Walmart’s lower P/S ratio and forward P/E could indicate it’s the better value buy.
  • The dividend yield of 2.19 percent is more than double that of Costco’s 1 percent.
  • With about half a trillion dollars in sales in 2018, Walmart remains the world’s largest retailer.

Why You Might Pick Costco Stock:

  • Walmart has posted four straight years of declining profits.
  • Costco posted over triple the revenue growth of Walmart for 2018 and saw its stock gain 42 percent in the last 12 months compared to 10.9 percent for Walmart.
  • Costco’s profit margins of 2.21 percent are better than double Walmart’s 1.02 percent.
  • The return on equity of 26.29 percent would indicate management is leveraging assets efficiently.

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The Final Word on WMT vs. COST

Walmart is the biggest retailer in the world, booking over half a trillion dollars in sales for its 2018 fiscal year and offering a healthy dividend, but Costco is growing at a much faster rate. However, whichever company you think is more likely to win the race to capture online sales might be the horse to back for the long run.

Click to keep reading about whether you should buy Facebook stock after its recent security breach.

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This article is produced for informational purposes only and is not a recommendation to buy or sell any securities. Investing comes with risk to loss of principal. Always conduct your own research and consider your investment decisions carefully.

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About the Author

Joel Anderson

Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.

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