Stocks were flat this morning in anticipation of the December Federal Reserve meeting minutes. Investors will be looking for clues on where Fed officials see policy heading, mainly what will happen with the Fed’s nearly $9 trillion balance sheet.
If you’re looking to rotate some of your earnings out of fashionable e-commerce plays and into consumer staple stocks in 2022, consider companies with a reliable cash flow and a proven track record of rewarding investors. Today we’ll focus on one such company.
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Costco Wholesale (COST) has long defied the general downtrend for retailers for a host of reasons. For starters, its bare-bones wholesaling operation doesn’t require the same attention to detail in its storefront. In fact, warehouses in the suburbs are the ideal over chic urban real estate, and its dominant discounting model has won it tremendous loyalty among frugal shoppers.
It also has tremendously reliable cash flow when compared with other retailers. Consider that with some 67 million paid memberships at roughly $60 per pop in annual dues. COST also enjoys a robust $4 billion in yearly sales rolling in simply from renewals.
It should be no surprise that Costco has not just weathered the pandemic but thrived amid it. Since the wholesaler provides staples and groceries, it has seen the same uptrend as other stores in this category — but as it also sells items like flat-screen TVs and propane grills that have been in high demand amid the stay-at-home trend. As a result, COST stock has surged 25% this year compared with 13% for the S&P 500 in the same period.
Considering fiscal 2021, the company expects revenues to grow by a little under 10% and earnings to expand by low double digits. That means these gains are part of a sustained uptrend.
Of 23 analysts offering recommendations for COST, 14 rate the stock a Strong Buy, 3 rate it Buy, and 6 rate it Hold.
Where to invest $1,000 right now...
Before you consider buying COST, you'll want to see this.
Investing legend, Keith Kohl just revealed his #1 stock for 2022...
And it's not COST.
Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.
Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
Find that to be extraordinary?
But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.