Key Points
Costco treats its workers, customers, and shareholders well.
It's a dividend-paying stock.
Its shares aren't exactly cheap right now.
If you'd plunked $10,000 into Costco (NASDAQ: COST) stock five years ago, your stake would have more than doubled and would be worth nearly $21,000. That's an average annual growth rate of 15.8%, well above the S&P 500's quite respectable average annual gain of 12.6% over the same period.
But what might a $10,000 investment in Costco today be worth five years hence?
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First, here's how Costco shares have performed in recent years:
Time Period |
Average Annual Return |
|---|---|
Past 1 year |
(3.54%) |
Past 3 years |
18.71% |
Past 5 years |
15.77% |
Past 10 years |
20.33% |
Past 15 years |
17.93% |
Source: Data from Morningstar.com as of Sept. 23, 2026.
That's impressive -- especially considering that over many decades, the S&P 500 has averaged annual returns close to 10% (ignoring inflation).
So what can we expect going forward? I think we shouldn't assume growth rates of 20% or higher, and even 15% might be a stretch. After all, as wonderful a business as Costco is, it's simply not growing super briskly. Its revenue for its recently reported fourth quarter, for example, grew a solid 11.2% year over year, while diluted earnings per share increased 15%.
If your $10,000 grows at, say, 12% for five years, you'll end up with a stake worth about $17,600 in five years. At 15%, you'd end up with about $20,000, and if Costco shares grow by 20% annually, in five years your $10,000 investment will be worth nearly $25,000.
I do think Costco is a stock worth owning, though, because it has a history of doing right by not only shareholders, but also employees and customers. Costco's business model is great, too, as it benefits greatly from its membership fees, which help it keep prices down. It's a dividend payer, too.
The only thing not great about Costco right now is its share price. It recently sported a forward-looking price-to-earnings (P/E) ratio of 40, which is on the steep side.
Selena Maranjian has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.