Costco Wholesale Corporation

NASDAQ Global Select
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Bullish +75

A Top‑Performing U.S. Stock That Canadian Investors Really Should Own

AI-generated analysis

🛒 Costco is highlighted as a top-performing U.S. stock with strong customer loyalty and consistent growth across market cycles.

💵 In the second quarter of fiscal 2026, Costco reported net sales of US$68.2 billion, marking a 9.1% increase year-over-year.

📈 The company raised its dividend by 13% in the most recent quarter, though it remains a growth-focused stock with only a 0.6% yield.

💸 Costco also occasionally provides special dividends to investors as part of its shareholder return strategy.

🌍 Canadian investors gain exposure to the larger and more diversified U.S. consumer market through this international expansion.

🇨🇦 As a top-performing U.S. stock, Costco's revenues in U.S. dollars can benefit Canadian investors if the greenback appreciates against the loonie over time.

🛡️ Costco's focus on essential goods and membership loyalty offers defensive appeal during economic slowdowns or periods of inflation.

📉 The retailer's efficient business model allows it to keep prices low while maintaining high-margin revenue from passive membership renewals.

📊 Costco Wholesale was notably absent from The Motley Fool Canada's team list of top 10 TSX stocks for 2026.

💰 While missing the Top 10 list, The Motley Fool still recommends Costco Wholesale as a compelling long-term growth investment option.

🤔 Investors are advised to consider adding Costco to a larger, well-diversified portfolio rather than viewing it as an isolated play.

Bullish Signals
  • Costco boasts strong customer loyalty that has persisted across different market cycles and continued to grow.
  • The company provides a membership-based model that generates high-margin revenue streams from passive renewals.
  • In its most recent second quarter of fiscal 2026, Costco reported net sales of US$68.2 billion, representing a solid 9.1% increase over the same period last year.
  • Costco's impressive numbers led to a 13% dividend hike in the most recent quarter, alongside occasional special dividends for investors.
  • The retailer continues to capture consumer spending even in a tighter economic environment despite market challenges.
  • Costco's global exposure and growth in Canada provide Canadian investors with a way to offset risk tied solely to the local market.
  • Currency exposure works in favor of Canadian investors as the U.S. dollar has historically appreciated relative to the loonie over longer periods.
  • The focus on essential goods, competitive pricing, and fierce membership loyalty gives Costco a defensive appeal during economic slowdowns.
Risk Factors
  • Despite being considered a 'growth-first' pick, Costco's dividend yield is only 0.6%, which may limit income generation compared to other high-yield options.
  • The stock was not included in The Motley Fool Canada's top 10 TSX stocks list for 2026, potentially signaling that analysts at the firm have concerns about its relative value or growth prospects compared to other Canadian equities.
Full Analysis
The article presents an investment recommendation from The Motley Fool Canada highlighting Costco Wholesale (NASDAQ:COST) as a compelling long-term holding for Canadian investors. The core thesis is that Costco offers strong growth, stability, and cross-border diversification, making it attractive despite being a U.S.-listed company. The text emphasizes the company's business model, which relies on a fiercely loyal membership base and a strategy of providing bulk goods at low prices to drive high-margin revenue streams from renewals. Financial performance is a key supporting point in the analysis, with the article citing specific metrics for Costco’s fiscal 2026 second quarter. Net sales are reported at US$68.2 billion, representing a 9.1% increase year-over-year, which demonstrates the retailer's ability to capture spending even during periods of economic volatility and tight consumer wallets. The company has also maintained consistent earnings growth through operational efficiencies such as its limited selection approach and scale advantages, which allow for favorable supplier terms. Additionally, the text notes that Costco recently hiked its dividend by 13%, though it emphasizes that the stock should be viewed primarily as a growth pick rather than a high-yield play, currently offering a tiny 0.6% yield along with occasional special dividends. For Canadian investors specifically, the article outlines three primary advantages to including Costco in their portfolios. First, it provides exposure to the larger and more diversified U.S. consumer market, offsetting risks associated with relying solely on the domestic Canadian retail sector. Second, the stock offers currency exposure; since costs are reported in U.S. dollars, investors may benefit from periods where the greenback appreciates against the Canadian dollar over the long term. Finally, the retailer possesses defensive appeal due to its focus on essential goods and competitive pricing, which helps it perform well during economic slowdowns. The piece concludes by positioning Costco as a great add-on for well-diversified portfolios seeking dependable long-term holding characteristics. It is important to note that the article includes a promotional segment for The Motley Fool Canada's paid services, suggesting their own top 10 TSX stocks for 2026 did not include Costco. While this serves as a plug for their newsletter or mailing list, the main body of the content focuses entirely on analyzing Costco's fundamentals, financial results, and strategic fit for Canadian investors, distinguishing it from generic market overviews where the company is incidental. The article provides sufficient detail on specific numbers like sales figures and dividend growth to support an investment decision based on the provided text.