COST vs AMZN

For growth investors, Amazon.

com, Inc. (AMZN) is the stronger pick with 12. 4% revenue growth year-over-year, versus 8. 2% for Costco Wholesale Corporation (COST). Amazon. com, Inc. (AMZN) offers the better valuation at 38. 1x trailing P/E (35. 1x 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, Amazon.

com, Inc. (AMZN) is the cheapest at 38. 1x versus Costco Wholesale Corporation at 55. 8x. On forward P/E, Amazon. com, Inc. is actually cheaper at 35. 1x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Amazon. com, Inc. wins at 1. 25x versus Costco Wholesale Corporation's 3. 30x — a reasonable growth-adjusted valuation.

Over the past 5 years, Costco Wholesale Corporation (COST) delivered a total return of +182.

6%, compared to +67. 3% for Amazon. com, Inc. (AMZN). Over 10 years, the gap is even starker: AMZN returned +730. 1% versus COST's +631. 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), Costco Wholesale Corporation (COST) is the lower-risk stock at 0.

13β versus Amazon. com, Inc. 's 1. 51β — meaning AMZN is approximately 1085% more volatile than COST relative to the S&P 500. On balance sheet safety, Costco Wholesale Corporation (COST) carries a lower debt/equity ratio of 28% versus 37% for Amazon. com, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Amazon.

com, Inc. (AMZN) is pulling ahead at 12. 4% versus 8. 2% for Costco Wholesale Corporation (COST). On earnings-per-share growth, the picture is similar: Amazon. com, Inc. grew EPS 29. 7% year-over-year, compared to 10. 0% for Costco Wholesale Corporation. Over a 3-year CAGR, AMZN leads at 11. 7% 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.

Amazon.

com, Inc. (AMZN) is the more profitable company, earning 10. 8% net margin versus 2. 9% for Costco Wholesale Corporation — meaning it keeps 10. 8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: AMZN leads at 11. 2% versus 3. 8% for COST. At the gross margin level — before operating expenses — AMZN leads at 50. 3%, 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, Amazon. com, Inc. (AMZN) is the more undervalued stock at a PEG of 1. 25x versus Costco Wholesale Corporation's 3. 30x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Amazon. com, Inc. (AMZN) trades at 35. 1x forward P/E versus 49. 7x for Costco Wholesale Corporation — 14. 7x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for AMZN: 12. 2% to $306. 77.

In this comparison, COST (0.

5% yield) pays a dividend. AMZN does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, Costco Wholesale Corporation (COST) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

13), +631. 6% 10Y return). Amazon. com, Inc. (AMZN) carries a higher beta of 1. 51 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (COST: +631. 6%, AMZN: +730. 1%), 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.

These companies operate in different sectors (COST (Consumer Defensive) and AMZN (Consumer Cyclical)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

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.