Costco Wholesale Corp. (NASDAQ:COST) has announced a 11.7% growth in net sales to $13.55 billion from $12.13 billion a year ago.
Comparable sales grew 10.8% in the U.S., 6% in Canada and 7.3% in the international market. The company's total comparable sales went up 9.7% in June. Sales from e-commerce increased 27.9%.
Excluding the impact of gasoline prices and currency swings, same-store sales in June grew 7.7% in the U.S., 3.4% in Canada and 6.9% outside of North America.
The company's total comparable sales grew 6.9% and e-commerce sales went up 27.7%.
On Wednesday, Costco Wholesale Corp. closed at $210.95 a share, down 0.35% from the previous trading day. The stock climbed 37% for the 52-week period through July 11 and outperformed the S&P 500 index by 24%. The stock in Costco is trading above the 200, 100 and 50-SMA lines:
The stock is reporting a 52-week range of $150 to $221.7 per share.
Costco is a loyal dividend payer and has been distributing free cash flow for almost 15 years. The company is distributing at quarterly dividend of 57 cents. If held constant, the distribution leads to a forward annual dividend of $2.28 per share, granting 1.08%.
GuruFocus indicates a forward dividend yield of 2.22% for the industry. In addition, Costco has a price-sales ratio of 0.67 times versus an industry median of 0.48 times.
Not only is Costoco one of the most attractive stocks in the industry in terms of dividend yield and price-sales ratio, the stock also appears to be overvalued based on the Peter Lynch chart. In fact, the current share price is above the Peter Lynch Earnings Line (P/E = 15) of $102.5 per share and the Price at Med P/E without NRI (P/E = 24.77) of $169.2 per share.
Also, an earnings yield of 3.2% is lower than the industry, which is standing at a median 5.3%.
With its secure stream of dividends and over $7 billion in cash on hand and securities for the sustainment of future payments, Costco Wholesale Corp. is undoubtedly a good stock for dividend income investors. However, I would hold the stock and wait for a significant retreatt to the level of the 100-SMA line before increasing the holding.
(Disclosure: I have no positions in Costco Wholesale Corporation.)
