3 Reasons Long-Term Investors Keep Coming Back to Costco Stock​

Costco Wholesale (NASDAQ: COST) is typically a reliable, market-beating stock. However, it's roughly flat over the past year, while the S&P 500 index is up more than 21%.

The stock had actually lost about 6% of its value in 2025, but it's already soaring after an excellent December performance report. Even after a rare down year, investors keep coming back to this top stock. Here are three reasons why.

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1. The resilience

Costco continues to demonstrate strong and steady growth despite a tough environment. It reports high, single-digit revenue growth nearly every quarter, backed up by its monthly reported statements.

Its membership model, which creates a reliable recurring revenue stream as well as healthy sales volume, lends itself to this kind of consistency and growth. In the 2026 fiscal first quarter (ended Nov. 23, 2025), sales increased 8.2%, while comparable sales (comps) were up 6.4%. Digitally enabled sales, which is what the company calls its version of e-commerce, increased 20.5%.

The market loved the December results. Costco releases a limited number of monthly metrics, and in December, sales increased 8.5% year over year, while comps were up 7%. Digitally enabled sales increased 18.9%.

Those are the kinds of results that keep investors coming back.

2. The long-term opportunity

Even though Costco is a household name, it doesn't actually have that many stores. It operates 923 warehouses worldwide, 633 of them in the U.S. In fact, it's not even in every U.S. state, giving it room to keep expanding.

It's also moving into a younger cohort, which gives it a longer growth runway. Since it launched online signups, almost half of new signups are under age 40. Costco has high renewal rates, and more new young members give the company years of growth ahead as they renew and do more of their shopping at Costco.

More members are also upgrading to executive status, which costs double the base price of a $65 membership. Executive members account for a disproportionate percentage of sales; there were 39.7 million in the first quarter, a 9.1% increase over last year, versus 81.4 million total paid members, a 5.2% increase. Executive members represented 74.3% of total sales.

3. The special dividend

Finally, Costco's regular dividend isn't especially attractive, yielding 0.54% at its recent price. However, it is growing, and more importantly, Costco has paid a special dividend four times over the past 10 years. The special dividend has been as low as $5 and as high as $15, bringing up the total yield for shareholders to rival that of some high-yielding dividend stocks.

These are all features of an excellent long-term stock, and it's easy to see why investors keep coming back to Costco.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.