Market Overview

Costco and Home Depot to Open Near 52-Week Highs


Ending a strong week in the stock market, big-box store operators Costco Wholesale (NASDAQ: COST) and Home Depot (NYSE: HD) reached new multiyear highs of $88.68 and $40.46 per share, respectively, in Friday's trading session.

Costco is expected to post double-digit EPS and revenue growth when it reports quarterly results this week. And Costco also reported better-than-expected same-store sales in November. The company is headquartered in Issaquah, Wash., and operates nearly 600 membership warehouses, primarily in North America. This S&P 500 component was founded in 1976 and now has a market cap of $37.6 billion.

Earnings per share are anticipated to grow 12.9% over the next five years. The dividend yield is 1.1%. But the P/E and PEG ratios are higher than the industry average. Twelve out of 24 analysts recommend buying the stock. The share price popped more than 7% in the past week and is more than 21% higher year to date. Over the past six months, the stock's performance has been in line with those of Target (NYSE: TGT) and Walmart (NYSE: WMT), but it has outperformed the broader markets.

Home Depot recently boosted its quarterly dividend by 16% and raised its guidance for the full fiscal year. It attributed solid quarterly results in part to strength in its core categories and to storm-related sales. The home improvement retailer operates more than 2,200 stores, primarily in North America. The Atlanta-based company is an S&P 500 component, has a market cap is $62.5 billion and was founded in 1978.

Home Depot's dividend yield is 2.9%, its return on equity is 20.0% and the long-term EPS growth forecast is 13.4%. The P/E and PEG ratios are higher than the industry average, but so is the operating margin. The consensus recommendation of 28 analysts following the stock is to buy it, but their mean price target is not much higher than the current share price. The share price jumped more than 10% in the past week and is almost 23% higher than a year ago. The stock has outperformed rival Lowe's (NYSE: LOW) and the broader markets over the past six months.

Posted-In: 52-Week Highs Costco dividend stocks home depotLong Ideas Short Ideas Pre-Market Outlook Trading Ideas


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