COST vs WMT

For growth investors, Costco Wholesale Corporation (COST) is the stronger pick with 8.

2% revenue growth year-over-year, versus 4. 7% for Walmart Inc. (WMT). Walmart Inc. (WMT) offers the better valuation at 47. 9x trailing P/E (44. 9x forward), making it the more compelling value choice. Analysts rate Costco Wholesale Corporation (COST) a "Buy" — based on 58 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Walmart Inc.

(WMT) is the cheapest at 47. 9x versus Costco Wholesale Corporation at 55. 8x. On forward P/E, Walmart Inc. is actually cheaper at 44. 9x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Costco Wholesale Corporation wins at 3. 30x versus Walmart Inc. 's 4. 08x.

Over the past 5 years, Walmart Inc.

(WMT) delivered a total return of +187. 7%, compared to +182. 6% for Costco Wholesale Corporation (COST). Over 10 years, the gap is even starker: COST returned +631. 6% versus WMT's +517. 6%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Walmart Inc.

(WMT) is the lower-risk stock at 0. 12β versus Costco Wholesale Corporation's 0. 13β — meaning COST is approximately 9% more volatile than WMT relative to the S&P 500. On balance sheet safety, Costco Wholesale Corporation (COST) carries a lower debt/equity ratio of 28% versus 67% for Walmart Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Costco Wholesale Corporation (COST) is pulling ahead at 8.

2% versus 4. 7% for Walmart Inc. (WMT). On earnings-per-share growth, the picture is similar: Walmart Inc. grew EPS 13. 3% year-over-year, compared to 10. 0% for Costco Wholesale Corporation. Over a 3-year CAGR, COST leads at 6. 6% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Walmart Inc.

(WMT) is the more profitable company, earning 3. 1% net margin versus 2. 9% for Costco Wholesale Corporation — meaning it keeps 3. 1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: WMT leads at 4. 2% versus 3. 8% for COST. At the gross margin level — before operating expenses — WMT leads at 24. 9%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Costco Wholesale Corporation (COST) is the more undervalued stock at a PEG of 3. 30x versus Walmart Inc. 's 4. 08x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, Walmart Inc. (WMT) trades at 44. 9x forward P/E versus 49. 7x for Costco Wholesale Corporation — 4. 8x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for COST: 5. 3% to $1070. 00.

All stocks in this comparison pay dividends.

Walmart Inc. (WMT) offers the highest yield at 0. 7%, versus 0. 5% for Costco Wholesale Corporation (COST).

For long-horizon retirement investors, Walmart Inc.

(WMT) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 12), 0. 7% yield, +517. 6% 10Y return). Both have compounded well over 10 years (WMT: +517. 6%, COST: +631. 6%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Consumer Defensive sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

WMT pays a dividend while COST does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.