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Barclays Initiates Coverage of Costco Wholesale With Equal-Weight Recommendation

Fintel Staff

Published: February 9, 2023 3:28 am

Last Updated: February 9, 2023 12:29 pm

On February 8, 2023, Barclays initiated coverage of Costco Wholesale with a Equal-Weight recommendation.

Analyst Price Forecast Suggests 11.76% Upside

As of February 9, 2023, the average one-year price target for Costco Wholesale is $563.11. The forecasts range from a low of $454.50 to a high of $666.75. The average price target represents an increase of 11.76% from its latest reported closing price of $503.86.

The projected annual revenue for Costco Wholesale is $249,005MM, an increase of 7.78%. The projected annual EPS is $14.82, an increase of 11.79%.

Costco Wholesale Declares $0.90 Dividend

Costco Wholesale said on January 19, 2023 that its board of directors declared a regular quarterly dividend of $0.90 per share ($3.60 annualized). Shareholders of record as of February 2, 2023 will receive the payment on February 17, 2023. Previously, the company paid $0.90 per share.

At the current share price of $503.86 / share, the stock’s dividend yield is 0.71%. Looking back five years and taking a sample every week, the average dividend yield has been 0.85%, the lowest has been 0.54%, and the highest has been 1.20%. The standard deviation of yields is 0.16 (n=236).

The current dividend yield is 0.87 standard deviations below the historical average.

Additionally, the company’s dividend payout ratio is 0.27. The payout ratio tells us how much of a company’s income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company’s income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend – not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.

The company’s 3-Year dividend growth rate is 0.38%, demonstrating that it has increased its dividend over time.

What are large shareholders doing?

VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 13,216,638 shares representing 2.98% ownership of the company. In it’s prior filing, the firm reported owning 13,050,785 shares, representing an increase of 1.25%. The firm increased its portfolio allocation in COST by 4.02% over the last quarter.

VFINX – Vanguard 500 Index Fund Investor Shares holds 10,041,439 shares representing 2.26% ownership of the company. In it’s prior filing, the firm reported owning 9,810,233 shares, representing an increase of 2.30%. The firm increased its portfolio allocation in COST by 4.30% over the last quarter.

Geode Capital Management holds 8,044,306 shares representing 1.81% ownership of the company. In it’s prior filing, the firm reported owning 7,947,099 shares, representing an increase of 1.21%. The firm increased its portfolio allocation in COST by 3.36% over the last quarter.

Bank Of America holds 7,874,562 shares representing 1.77% ownership of the company. In it’s prior filing, the firm reported owning 8,385,811 shares, representing a decrease of 6.49%. The firm decreased its portfolio allocation in COST by 2.81% over the last quarter.

Invesco Qqq Trust, Series 1 holds 6,504,342 shares representing 1.47% ownership of the company. In it’s prior filing, the firm reported owning 6,402,203 shares, representing an increase of 1.57%. The firm increased its portfolio allocation in COST by 3.74% over the last quarter.

Fund Sentiment

There are 4031 funds or institutions reporting positions in Costco Wholesale. This is an increase of 38 owner(s) or 0.95%.

Average portfolio weight of all funds dedicated to US:COST is 0.8276%, a decrease of 3.0888%. Total shares owned by institutions increased in the last three months by 0.61% to 330,089K shares.

Costco Wholesale Background Information
(This description is provided by the company.)

Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box retail stores. The company offers sundries, dry groceries, candies, coolers, freezers, liquor, and tobacco and deli products; appliances, electronics, health and beauty aids, hardware, garden and patio products, sporting goods, tires, toys and seasonal products, office supplies, automotive care products, postages, tickets, apparel, small appliances, furniture, domestics, housewares, special order kiosks, and jewelry; and meat, produce, service deli, and bakery products.

This article originally appeared on Fintel