Best Stock to Buy Right Now: Costco vs. Realty Income
Costco (NASDAQ: COST) operates nearly 900 club stores around the world. Realty Income (NYSE: O) leases out more than 15,600 single-tenant properties, largely to retailers, across North America and Europe. They represent two very different ways to invest in the retail sector, but which one is the best stock to buy now? Here's how you can decide.Costco operates club stores, which means that its customers pay an annual membership fee that gives them the privilege of shopping in a Costco store. This is a very different model from a typical retailer, with Costco's membership fees making up just over 50% of its gross profit. Membership fees are an annuity-like income stream that allows the company to sell products with slimmer margins than its competitors.No wonder the membership renewal rate is regularly above 90%. And while earnings will wax and wane over time, offering good prices tends to make Costco resilient to economic downturns. Notably, the company has increased its dividend annually for over two decades. The average annualized growth rate over the past 10 years was a hefty 12%.Continue reading
Costco (NASDAQ: COST) operates nearly 900 club stores around the world. Realty Income (NYSE: O) leases out more than 15,600 single-tenant properties, largely to retailers, across North America and Europe. They represent two very different ways to invest in the retail sector, but which one is the best stock to buy now? Here's how you can decide.
Costco operates club stores, which means that its customers pay an annual membership fee that gives them the privilege of shopping in a Costco store. This is a very different model from a typical retailer, with Costco's membership fees making up just over 50% of its gross profit. Membership fees are an annuity-like income stream that allows the company to sell products with slimmer margins than its competitors.
No wonder the membership renewal rate is regularly above 90%. And while earnings will wax and wane over time, offering good prices tends to make Costco resilient to economic downturns. Notably, the company has increased its dividend annually for over two decades. The average annualized growth rate over the past 10 years was a hefty 12%.
