Walmart and Costco are two of the most recognized retailers. Both companies strive to offer affordable prices on a wide range of products. Consumers aren’t the only ones who have benefited from Walmart and Costco.
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These retail giants have made plenty of investors happy. Both stocks have delivered positive returns over many years while offering dividends for patient investors. While these stocks have delivered impressive long-term returns, one of them is the clear winner.
Here’s what you should know when comparing Walmart and Costco stock.
According to Finance Charts, Walmart has delivered a 275% return over the past 10 years. Shares have also more than doubled over the past five years and are up by more than 40% over the past year, even with tariffs leading to negative year-to-date returns.
Walmart has been a haven during inflation. Shares only dropped by 2% in 2022 amid record inflation and regular interest rate hikes. People still need to buy the essentials in any economy, and many people turn to Walmart for the lowest prices.
Walmart has gained some momentum with its e-commerce sales, and that has led to meaningful stock gains. E-commerce sales increased by 16% year-over-year in the first quarter report for this year. It’s a sign that Walmart can compete with Amazon on the digital front.
The company has also benefited from an advertising segment that grew by 29% year-over-year. However, advertising only represents a small portion of Walmart’s revenue. It can take several years before Walmart Connect’s ad growth translates into higher profit margins.
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Finance Charts shows that Costco has delivered a 667% return over the past decade. That’s more than double Walmart’s return during the same stretch, and the pattern continues with a shorter lens. The wholesaler has produced a 235% return for investors over the past five years. However, the stock has only been up by 31% over the past year. That’s still impressive, but it’s lower than Walmart’s return during the same stretch.
Costco was less resilient during the high inflation and interest rate hikes that defined 2022. Shares dropped by about 20% that year but rallied stronger than Walmart shares. Costco has been opening more wholesale locations and expanding its international footprint.
finance.yahoo.com
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