Costco stock rises 11.5% as analysts recommend alternative investments

Costco Wholesale's stock has seen modest gains in 2026, climbing 11.5% so far, but it still lags behind the S&P 500, which has returned 13.7%. The membership-based retailer is scheduled to release its fourth-quarter earnings report on September 26, a key event that could influence its stock price in the short term. Currently trading at around $961 per share, Costco's performance may not excite short-term investors who are looking for immediate returns.

The company’s strong membership renewal rate of 92.2% in North America indicates solid customer loyalty, which bodes well for its resilience during economic downturns. While Costco is not entirely recession-proof, its business model, which focuses on selling necessities in bulk, tends to keep customers engaged even in tough times. This customer loyalty is further supported by the retailer's dividend payouts, which, although modest at a yield of 0.6%, still provide a steady income stream for shareholders. Additionally, Costco has a history of providing special dividends, with the last one being a $15 per share payment in 2024.

Long-term investors might find Costco appealing despite its recent underperformance. Over the past five years, the company's total return of 115% significantly outpaces the S&P 500's 87% during the same period. Over ten years, Costco boasts an impressive 573% gain, compared to the S&P 500's 321%. This long-term perspective highlights the potential benefits of holding onto Costco stock, even if it does not outperform the broader market in the short term.

However, investors should weigh their options carefully. The Motley Fool's analyst team has identified ten stocks that they believe offer better investment opportunities right now, suggesting that Costco may not be the best choice for those seeking immediate high returns. As the market continues to fluctuate, potential investors should consider both Costco's strengths and the competitive landscape before making decisions about buying its stock.