Pest Analysis For Costco

Stocks have given the highest yield over the past seventy years. The real challenge is to find a stock that is both profitable and safe, which I do using fundamental analysis.
My long term strategy looks at ways to measure the safety of companies. In a world with dozens of startups erupting every day, the company must have a large market cap to ensure dominance over the industry. In addition, the company should have a modest P/E ratio, one of at least less than the average P/E ratio in the sector. This generally prevents a company from crashing if it is has an earnings report which is not as glamorous as investors expected. If its P/E ratio is low for the industry, the stock often undervalued, although one can check this through many ways such
The first one is Costco, a wholesale corporation. Its competitive advantage is its strong business model in which Costco focuses on having low operating costs by buying only a few brands of each item from producers in bulk and relying on word of mouth advertising. They pay employees well which ensures efficiency through retention. Finally, they reward loyal consumers the more they purchase, which entices them to buy more. Costco actually makes its money through membership fees, which are steady and therefore safer in the future. Loyalty is especially important in today’s day and age because there are so many competitors that only companies loved by customers will survive. To ensure safety, Costco is diversified among three main categories, consumer services, insurance services, and business services, which can be broken down further. It not only has loyal customers, but loyal investors as its debt to equity ratio is 59.42, much less than the leading wholesale company Walmart, with a debt to equity ratio of 63.49. It has so many investors that it has a market cap of 71.36 billion dollars. Although Costco is very popular among its customers and investors, it still has a P/E ratio of 29.88, which is less than its industry. Costco makes good use of its money and has a return of equity ratio of 20.63%, more than Walmart with a ratio of 18.62%. Costco will likely never go out of business because it sells items that people need: food, water, clothing, and shelter, and because of its affordable prices, loyal customers, and tight economy, its products will be in demand. It is based in the US, which has a strong economy as revealed by the Fed, and does not have to worry about problems faced in the EU and China such as the devaluation of the yuan. The persistent management is taking advantage of this as Costco grows across the