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Costco WholesaleCOST -0.08%94 Forward Rate of Return (Yacktman) % is 12.97% as of May. 2026, which is 7% above its 10-year median of 12.11. GuruFocus rates COST with a GF Score™ of 94/100 and a GF Value™ of $1,031.78 (Fairly Valued). The stock has 1 warning sign investors should review. Among 218 Retail - Defensive companies, Costco Wholesale ranks worse than 54.59% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Costco Wholesale's forward rate of return for was 12.97%.
The historical rank and industry rank for Costco Wholesale's Forward Rate of Return (Yacktman) % or its related term are showing as below:
COST'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 7.94 Med: 12.11 Max: 15.93
Current: 12.96
During the past 13 years, Costco Wholesale's highest Forward Rate of Return was 15.93. The lowest was 7.94. And the median was 12.11.
COST's Forward Rate of Return (Yacktman) % is ranked worse than 54.59% of 218
companies
in the Retail - Defensive industry
Industry Median: 14.08
vs COST: 12.96
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Costco Wholesale (NAS:COST) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Costco Wholesale Forward Rate of Return (Yacktman) % Related Terms
Costco Wholesale Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for Costco Wholesale's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Costco Wholesale Forward Rate of Return (Yacktman) % Chart
COST vs TGT, DG, DLTR: Forward Rate of Return (Yacktman) % Comparison
For the Discount Stores subindustry, Costco Wholesale's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Costco Wholesale Forward Rate of Return (Yacktman) % vs Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Costco Wholesale's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Costco Wholesale's Forward Rate of Return (Yacktman) % falls into.
Costco Wholesale Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 12.97% mean?
Costco Wholesale (COST) has a Forward Rate of Return (Yacktman) % of 12.97% as of May. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Costco Wholesale and its competitors. This is near median its historical median of 12.11. Over the past decade, Costco Wholesale's Forward Rate of Return (Yacktman) % has ranged from 7.94 to 15.93. According to the industry distribution chart, Costco Wholesale ranks #119 out of 218 companies in the Retail - Defensive industry, placing it in the top 54.6%.
Is Costco Wholesale's Forward Rate of Return (Yacktman) % too high?
Costco Wholesale's current Forward Rate of Return (Yacktman) % of 12.97% is near median its 10-year median of 12.11. Over the past 10 years, this metric has ranged from a low of 7.94 to a high of 15.93. The Retail - Defensive industry median Forward Rate of Return (Yacktman) % is 14.08. Costco Wholesale's value of 12.97% is 7.9% below this industry median. Based on the distribution chart, Costco Wholesale ranks #119 out of 218 companies in the Retail - Defensive industry, which is below the industry midpoint. Overall, Costco Wholesale has a GF Score™ of 94/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Costco Wholesale's Forward Rate of Return (Yacktman) % compare to TGT and DG?
According to the Retail - Defensive industry distribution chart, Costco Wholesale ranks #119 out of 218 companies for Forward Rate of Return (Yacktman) %. This places Costco Wholesale in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 14.08. Costco Wholesale's value of 12.97% is 7.9% below this benchmark. Historically, Costco Wholesale's own Forward Rate of Return (Yacktman) % has ranged from 7.94 to 15.93 over the past decade. While the company's 10-year median is 12.11 vs. the industry median of 14.08, Costco Wholesale has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Retail - Defensive company?
The median Forward Rate of Return (Yacktman) % among Retail - Defensive companies is 14.08, based on 218 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Costco Wholesale's current Forward Rate of Return (Yacktman) % of 12.97% is 7.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Costco Wholesale and its competitors. For the Retail - Defensive industry, the median Forward Rate of Return (Yacktman) % is 14.08 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Costco Wholesale's current Forward Rate of Return (Yacktman) % is 12.97%, which is near median its own 10-year median of 12.11. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Costco Wholesale stock overvalued right now?
Based on GuruFocus' analysis, Costco Wholesale (COST) is currently considered Fairly Valued. The stock's GF Value™ is $1,031.78, compared to a current price of $961.06 — trading 6.9% below its estimated fair value. The current Forward Rate of Return (Yacktman) % is 12.97%, which is near median its 10-year median of 12.11 and 7.9% below the Retail - Defensive industry median of 14.08. Costco Wholesale's overall GF Score™ is 94/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For Costco Wholesale (COST), the current Forward Rate of Return (Yacktman) % is 12.97% as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Costco Wholesale (COST) Overvalued in 2026?
Based on GuruFocus' analysis, Costco Wholesale stock appears to be undervalued.
The current stock price of $961.06 is trading 6.9% below its estimated GF Value™ of $1,031.78.
GuruFocus considers Costco Wholesale to be Fairly Valued.
Key valuation signals for COST:
Forward Rate of Return (Yacktman) %: 12.97% (near median its 10-year median of 12.11)
GF Value™: $1,031.78 vs. price of $961.06 (6.9% below fair value)
Industry Position: 7.9% below the Retail - Defensive median (#119 of 218)
No single metric tells the full story. See the COST stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Founded in 1983, Costco Wholesale now operates a global chain of membership-based warehouse clubs, delivering high-quality goods and services at consistently low prices. As of its most recent fiscal year, Costco operated approximately 910 warehouses, serving more than 80 million members across its three geographic segments: Costco US (approximately 73% of total revenue), Costco Canada (13%), and Costco International (14%).Costco's core value proposition—quality products at unbeatable prices—has yielded consistently strong member renewal rates (93% in the US and Canada and nearly 90% internationally). About 55% of Costco's fiscal 2025 revenue came from its grocery offerings, and another 25% from general merchandise.
94GF Score
Get the complete analysis for COST
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