If I Could Only Buy and Hold 1 Stock Heading Into the Eye of a Stock Market Storm, This Would Be It
Key Points
Costco's value pricing makes it an attractive shopping destination.
The company's same-store sales have continued growing.
It continues to expand.
Reading the news, investors have a lot of things that concern them. These include stubbornly high inflation, the war in Iran that's elevating energy prices, high tariffs that are inflating the prices of certain goods, the Federal Reserve's raising of interest rates, and higher long-term yields.
Right now, the equity market has held up well. The S&P 500 index has gained 14.1% this year through Oct. 9.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Perhaps the market will continue its smooth sailing. However, at some point, troubling economic times, along with a poor stock market performance, will arrive. But that shouldn't keep you away from buying stocks. Certain companies do well no matter the economic environment. Costco (NASDAQ: COST) tops my list.
Here's what makes Costco stand out.
Image source: Getty Images.
Loyal customers
It may seem strange that a retailer, particularly one that charges an annual membership fee, does well during challenging economic times. But Costco isn't an ordinary retailer.
You have to become a member and pay an annual fee to shop at Costco. What do you get for your money? Quite a bit, actually. You can shop at its huge warehouses, which have every product or service imaginable. Typically, these come in large sizes that Costco sells at attractive unit prices.
Members certainly feel like they're getting a good value for their money. Renewal rates consistently hover at 90%, including 89.8% globally for the most recent fiscal year ended Aug. 30.
Costco also consistently adds new paid members. It ended the period with 84.1 million paid members, up from 76.2 million and 81 million in 2024 and 2025, respectively.
Drawing a crowd
Even though consumers are facing difficult times, they remain drawn to Costco's warehouses. At a time when other retailers have struggled, the company has produced consistent same-store-sales (comps) growth.
Costco's comps grew 6.7% and 6.6% for the fourth quarter and year, respectively. To analyze and compare the company's core operations, these figures have been adjusted to remove volatile gas price changes and foreign-currency translations.
Costco isn't merely growing sales without regard to profitability, either. It continues to increase its operating profit. Fourth-quarter operating income grew 13.8% versus a year ago to $3.8 billion. That capped off a year in which profit increased 12.5%.
The company has been doing so well that management continues to prudently expand the number of warehouses. Last year, it added 25, in line with its rate over the last several years. That brought the total to 939 locations.
Lawrence Rothman, CFA has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.