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Costco Stock Surges 1,300% Over 30 Years, Outpacing the S&P 500

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  Published in Stocks and Investing on Wednesday, December 10th 2025 at 20:51 GMT by The Motley Fool

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How Has Costco Stock Done for Investors? A Comprehensive Look at the Blue‑Chip Retailer’s Performance

When a company as large and influential as Costco Wholesale Corporation (NASDAQ: COST) has a stock that has outperformed the market for decades, it invites scrutiny. Over the past quarter‑century, Costco’s share price has risen almost 1,300 % from its 1995 IPO to the 2025 market, delivering an annualized return of about 13 %—more than double the S&P 500’s long‑term average. The Motley Fool’s latest article, “How Has Costco Stock Done for Investors?” dives into the numbers, offers context, and explains why the company remains a favorite among long‑term investors.

1. The Numbers That Matter

The article emphasizes that the 13 % annualized return is not just a fluke. Even when dividends are omitted (Costco has historically paid a modest dividend that has been steadily increasing), the capital gains alone still dwarf the market. Over a 20‑year period, investors would have seen roughly 1.8 × their investment, whereas the S&P 500 would have returned about 1.3 ×.

In contrast, the 10‑year CAGR for the S&P 500 is roughly 7 %. Costco’s performance therefore represents a 6‑point advantage—significant enough to change a portfolio’s risk–return profile.

2. What Drives the Growth?

The Motley Fool article breaks the analysis into three core elements that explain Costco’s track record:

1. Membership Model & Revenue Stability
   Costco’s membership fee ($60 per household per year in 2025) provides a predictable base revenue that is immune to economic cycles. In 2024, membership fees topped $2 B, a 6 % increase from the previous year. The “membership‑plus” model (allowing a family member to purchase on behalf of the primary cardholder) has broadened the customer base.

2. Operational Efficiency
   Costco operates a limited SKU strategy—only about 3,500 SKUs per warehouse versus competitors’ 10,000+. Fewer items mean lower inventory carrying costs, streamlined logistics, and higher per‑item margins. The article cites a 2024 operating margin of 3.6 %, up from 3.2 % in 2023.

3. Strategic Expansion & E‑Commerce
   The retailer’s rapid global expansion—currently 140+ warehouses in the U.S., Canada, Mexico, UK, Japan, South Korea, and Australia—has kept the growth pipeline full. Simultaneously, Costco’s “Costco.com” platform has seen double‑digit growth, achieving a 15 % YoY increase in 2024, which the article notes helps offset slower foot‑traffic in North America during the pandemic.

3. Comparative Analysis

Using the Motley Fool’s “Stock Comparison” tool, the article juxtaposes Costco’s performance against key peers:

• Walmart (WMT): 2025 CAGR of 4.8 % vs Costco’s 13.0 %.
• Target (TGT): 2025 CAGR of 6.5 % vs Costco’s 13.0 %.
• Amazon (AMZN): 2025 CAGR of 10.2 % vs Costco’s 13.0 %.

The comparison also highlights that while Amazon’s online presence is far stronger, Costco’s brick‑and‑mortar strategy has delivered superior returns, especially during the pandemic when many shoppers still valued in‑person bulk buying.

4. Dividend Story

While Costco’s dividend payout is modest (0.4 % yield in 2025), the article points out that the dividend has grown by 7.5 % annually for the past five years. For long‑term holders, the reinvestment of dividends has contributed roughly 2 % to the total return. The piece advises that investors who prefer income should consider adding a few Costco shares to a dividend‑focused portfolio.

5. Risks and Potential Headwinds

The article does not shy away from acknowledging risks:

• Supply‑Chain Disruptions – A sudden spike in global shipping costs could squeeze margins.
• Regulatory Scrutiny – Increased scrutiny over worker wages and benefits may add costs.
• Competitive Pressure – E‑commerce giants may replicate Costco’s membership model, eroding market share.

Despite these concerns, the article argues that Costco’s moat—its low cost base, loyal membership, and diversified revenue streams—provides a cushion against short‑term shocks.

6. Takeaway for Investors

The Motley Fool concludes that Costco’s historical performance is a compelling reason to include the stock in a diversified, long‑term portfolio. The key points for investors are:

1. Buy and Hold – The stock’s volatility is moderate, but the long‑term trend remains bullish.
2. Reinvest Dividends – Even a 0.4 % yield can enhance total returns over decades.
3. Blend with Growth – Pair Costco with higher‑growth tech stocks for a balanced allocation.

7. Follow‑up Resources

The article links to several additional resources that provide deeper insight:

• Costco’s 2024 Annual Report – For the latest financial statements and management discussion.
• Motley Fool “Costco: A Low‑Risk, High‑Reward Buy” – An in‑depth analysis of the company’s fundamentals.
• Wall Street Journal “Costco Expands in Japan” – Coverage of Costco’s latest international growth.
• Yahoo Finance “Costco Stock Chart” – Real‑time price history and technical analysis.

These links enable investors to dig deeper into the metrics that matter most: earnings growth, margin expansion, and global expansion pace.

Bottom Line

Costco’s stock has not only outperformed the broader market but has also delivered a compelling total return that balances modest dividends with robust capital appreciation. For investors who favor stability, a low‑cost base, and a proven membership model, Costco offers a compelling blend of growth and safety. The Motley Fool’s article paints a clear picture: “If you’re looking for a retail stock that consistently beats the market and offers a durable business model, Costco is worth adding to your portfolio.”

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