COST

Investors aren't sure what to make of Kroger's (NYSE: KR) business right now. The chain credits its e-commerce platform, plus popular in-store brands like Simple Truth, for delivering that improved growth.

Ideally, a company has sufficient earnings to reinvest in the business and reward shareholders by returning a portion as dividend payments. One way to see how a company is balancing earnings and reinvestment is by looking at its payout ratio. There's no specific percentage to watch to determine if a payout ratio is too high.

In such uncertain times, Fools interested in consumer discretionary stocks have some attractive choices in companies that have so far weathered the pandemic. Among these, Costco Wholesale (NASDAQ: COST) used its warehouse club e-commerce savvy to move profitably through the worst of COVID-19, while Constellation Brands (NYSE: STZ) is a beer company with a brand portfolio that's been punching above its weight even as bars and restaurants undergo closures or capacity limitations for health and safety reasons. Costco, while it continues to make solid in-store sales, has also managed to position itself successfully in the digital realm, with its adjusted fourth quarter (Q4) 2020 e-commerce sales skyrocketing 91.3% year over year and its full-year e-commerce sales rising 50.1%.

ISSAQUAH, Wash., Jan. 21, 2021 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced that its Board of Directors has declared a quarterly cash dividend on Costco common stock of 70 cents per share. The quarterly dividend is payable February 19, 2021, to shareholders of record at the close of business on February 5, 2021. Costco currently operates 803 warehouses, including 558 in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 14 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia. Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health-care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, COVID-19 related factors and challenges, including (among others) the duration of the pandemic, the unknown long-term economic impact, reduced shopping due to illness, travel restrictions or financial hardship, shifts in demand away from discretionary or higher-priced products, reduced workforces due to illness, quarantine, or government mandates, temporary store closures due to reduced workforces or government mandates, or supply-chain disruptions, capacity constraints of third-party logistics suppliers, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law. CONTACTS:Costco Wholesale Corporation Richard Galanti, 425/313-8203 Bob Nelson, 425/313-8255 David Sherwood, 425/313-8239 Josh Dahmen, 425/313-8254

Amazon (AMZN) stock has room to grow, with the e-commerce giant’s cloud service likely to be a positive driver in 2021, according to one BofA analyst. Justin Post raised his price target on the stock to $4,000 from $3,650, while maintaining a Buy rating. Shares were trading 2% higher during Thursday’s session.

This article will reflect on the compensation paid to W. Jelinek who has served as CEO of Costco Wholesale Corporation...

In the latest trading session, Costco (COST) closed at $361.30, marking a +1.93% move from the previous day.

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In the latest trading session, Costco (COST) closed at $362.35, marking a -1.25% move from the previous day.

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Bull of the Day: BJ's Wholesale Club (BJ)

The COVID-19 pandemic made 2020 quite an eventful year for supermarkets and grocery chains. The likes of Walmart, Costco, Dollar General and Target adapted quickly to changing consumer behavior by offering several contactless delivery options. They also ramped up efforts to ensure adequate supply as Americans stockpiled groceries and essentials amid lockdown fears. What's more, the retail space saw unprecedented e-commerce sales. It would be unfair to expect top-line growth rates experienced during the lockdowns to repeat this year. That said, Wall Street experts see continued upside in certain retailers even as the pandemic tailwinds subside. Let's stack up BJ’s Wholesale against Costco using the TipRanks Stock Comparison tool, and pick the stock that could offer better returns this year. BJ’s Wholesale Club (BJ) The demand triggered by the pandemic provided the kind of push BJ’s Wholesale needed after generating lackluster revenue growth of 1.4% in FY19 (ended Feb. 1, 2020). Stock-piling tendencies and shelter-at-home orders drove an 18.2% rise in the warehouse club’s revenue in the first nine months (ended Oct. 31) of FY20 and helped it gain market share. Notably, BJ’s beat the Street’s expectations, with overall revenue growing 15.6% to $3.73 billion in 3Q. Net sales increased 15.7% to $3.65 billion and membership fee income rose 11% to $85 million. Excluding gasoline, comparable club sales grew 18.5%, with digitally enabled sales exploding 200%. What’s more, adjusted 3Q EPS jumped over 124% year-over-year to $0.92. The improved business boosted cash flows and helped bring down BJ’s debt levels. Furthermore, the company is gaining new members at a strong rate. Its membership base at the end of 3Q reflected an increase of 630,000 members year-over-year on a net basis, which was way higher than the 200,000-250,000 membership additions experienced historically. To ensure its growth beyond the pandemic, BJ’s is expanding in underpenetrated categories like fitness equipment, household goods, select consumer electronics categories and indoor furniture. It has also enhanced its food business with more healthy and organic options. (See BJ stock analysis on TipRanks) Compared to giants like Costco and Walmart’s Sam Club, BJ’s has a smaller geographic presence. It operates 219 warehouse clubs and 149 BJ's gas locations in 17 states in the Eastern US. With four club additions in FY20, the company intends to expand further. Following a discussion with senior management, Merrill Lynch analyst Robert Ohmes noted that BJ plans to open clubs in both new and existing markets and he expects the retailer to target new markets in Midwest cities with “disproportionate population growth (e.g. Columbus, Indianapolis, Nashville).” The analyst feels that accelerated store openings will boost growth in both membership fee income and comps over the long-term, as new clubs scale over time. In line with his optimism, Ohmes reiterated a Buy rating on BJ’s with a price target of $59 and concluded, “While difficult comparisons and a “return to normal” present risks to membership metrics in 2021, we expect increasing higher-tier penetration, improved merchandise offerings, and increased customer frequency / basket sizes to power renewal rates going forward. The membership base and business overall also both remain meaningfully stronger than they were in 2019.” BJ’s scores the Street’s cautiously optimistic Moderate Buy analyst consensus based on 5 Buys and 4 Holds. The average price target stands at $51.13, implying 33.8% upside potential from current levels. Shares have risen by an impressive 67% over the past 52 weeks. Costco Wholesale (COST) Pandemic or no pandemic, Costco is considered to be one of the most consistent retail players. It operates 803 warehouses, including 558 in the US and Puerto Rico. From food and sundries to appliances and apparel, the warehouse chain offers a wide range of products at low prices to its members. Costco’s revenue grew 16.7% to $43.2 billion in 1Q FY21 (ended Nov. 22) as the company continues to experience heightened sales amid the pandemic. Net sales grew about 17% to $42.3 billion, while membership fees increased 7% to $861 million. Comparable sales grew 15.4% in the quarter. Overall, robust revenue and operating margin expansion drove a 38% increase in EPS to $2.62. Membership growth and retention rates are key metrics for Costco as membership fee has a material impact on its profitability. Renewal rates of 90.9% for US and Canada and 88.4% worldwide in the first quarter are a clear indication of the customer loyalty that the company enjoys. Costco ended 1Q FY21 with 59.1 million paid members, reflecting an 8% rise. Last week, Costco reported growth of 12.3% and 10.7% in its December net sales and comparable sales, respectively. (See COST stock analysis on TipRanks) Commenting on the December performance, Robert W. Baird analyst Peter Benedict notes that Costco delivered its 7th consecutive monthly double-digit core comps (excludes gasoline and foreign exchange impact) gain. That said, he pointed out that December core comps of 10.9% reflected a deceleration from November's 14.6%, mainly due to softer traffic and less robust growth in food and sundries. Despite the slowdown, Benedict remains optimistic about Costco's loyal membership base and structural cost advantages. He reiterated a Buy rating on the stock with a $410 price target. Looking ahead, Costco continues to enhance its e-commerce capabilities given the rapid sales increase since the pandemic (86.4% growth in 1Q FY21 alone). E-commerce sales accounted for just 6% of the FY20 topline. The acquisition of logistics provider Innovel Solutions last year will help in driving further online sales of “big and bulky” items like appliances and furniture. Costco is also expanding its store footprint and added eight new (net) units in 1Q FY21, with it hoping to open up to 23 units in the full-year. Shares have gained 22.4% over the past year and the average price target of $404.53 indicates upside potential of 10.2% in the 12 months ahead. The Street is bullish on the stock, with 15 Buys and 4 Holds adding up to a Strong Buy analyst consensus. Conclusion Costco’s proven track record over the past several years and its strong business model make it an attractive play for the long-term. That said, right now, the improvement in BJ’s Wholesale’s performance, the possibility of expanding its presence and the attractive upside potential in the stock make it a better retail pick. To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment

Individual investors have access to a nearly infinite amount of market data coupled with a never-ending stream of forecasts and opinions from financial pundits. The concept can be applied to picking stocks, and in that vein, investors would do well to follow one obvious rule above all others: Simply invest in businesses that sell outstanding products and services. Let's look at three great examples of companies that have outperformed the stock market by delighting their customers.

Just find a business with an enduring competitive advantage, and hold on to the stock for long enough to let those returns compound into something great. The best part about this approach is that it doesn't require you to discover and hold a tiny, volatile stock that might crash at any time. If it's a proven market share leader like Costco Wholesale (NASDAQ: COST), your odds of success go up even though the retailer is already a well-known commodity on Wall Street.

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Through some of the biggest consumer demand shifts in living memory, few retailers performed as well as Target (NYSE: TGT) did in 2020. The company leaned on its consumer staples offerings through the early days of the pandemic before quickly recognizing -- and capitalizing on -- soaring demand for home furnishings and home maintenance products as the year progressed. The retailer notched impressive profit margin wins, with operating income soaring 35% through late October thanks in part to the popularity of premium fulfillment options like same-day delivery.