Costco Costs More Than $920 a Share. Here's Why I'd Still Buy One.
2026-09-27 17:07
•Rick Munarriz •The Motley Fool
••• • Axe Cap view
Costco’s High Price Masks a Solid Defensive Play
Costco’s strong earnings and dividend history justify its premium valuation, even from a South African investor’s view.
Costco’s share price north of $920 might look steep, especially when compared to local stocks trading in rands. But don’t let the headline number fool you. The company’s resilience—invisible to some—is in its steady, recession-resistant cash flow and a 22-year streak of dividend increases. For South African investors, the USD/ZAR rate puts this high price into perspective, but the Rand’s recent softness means buying favorably priced global growth and stability is more necessary than ever. Locally, you don’t get this sort of low-volatility earnings lift off from retail stocks like Shoprite or Woolworths during tough economic times. If the rand strengthens dramatically, that could blunt returns, or if global inflation spikes and forces Costco to raise prices faster than consumers can bear, demand would falter. But for patient capital seeking defensive qualities in a turbulent world, Costco stands out. this is just our opinion and not financial advice
Watch USD/ZAR closely and consider adding Costco via global ETF exposure or direct purchase as a portfolio anchor. Trim more volatile local cyclical shares until inflation eases.
- COST
- USD/ZAR
- Rand strength hurting returns when converting profits
- Rising global inflation squeezing consumer spending at Costco
7/10
Despite Costco's high share price of $922.77, the article argues it remains a compelling investment. The warehouse operator posted strong quarterly earnings with 10% revenue growth and faster bottom-line expansion. With a low beta of 0.01, 22 consecutive years of dividend increases, and an expected special distribution, Costco offers recession-resistant value even at current valuations.
Our take is based on reporting first published by The Motley Fool.