Costco Wholesale Corporation (COST) vs Dollar Tree, Inc. (DLTR)

Costco Wholesale Corporation and Dollar Tree, Inc. are both Discount Stores companies. Costco Wholesale Corporation is the larger, with a market value of $396.7B against $21.3B — 18.6× the size. Dollar Tree, Inc. trades at the lower P/E: 13.9× against 46.3×. Costco Wholesale Corporation grew revenue faster over the last twelve months: 9.23% against 8.18%. Dollar Tree, Inc. has the higher net margin (8.03% vs 3.01%) and the lower return on invested capital (26.0% vs 36.6%). Across the 22 metrics below, Dollar Tree, Inc. leads on 16 and Costco Wholesale Corporation on 6.

Valuation

Metric COST DLTR Discount Stores median
P/E 46.30 13.91 19.55
P/S 1.39 1.08 1.08
P/B 12.21 6.35 5.43
Price to free cash flow 46.47 10.99 33.31
EV/EBITDA 28.65 8.38 12.17
EV/Sales 1.35 1.21 1.06
Earnings yield 2.16% 7.19% 3.95%
Free cash flow yield 2.15% 9.10% 2.93%

Profitability

Metric COST DLTR Discount Stores median
Gross margin 12.88% 38.74% 27.27%
Operating margin 3.82% 10.97% 4.45%
Net margin 3.01% 8.03% 3.01%
Free cash flow margin 3.00% 9.85% 3.30%
Return on equity 29.15% 45.87% 20.83%
Return on assets 10.92% 11.76% 7.60%
Return on invested capital 36.57% 25.96% 13.21%

Growth

Metric COST DLTR Discount Stores median
Revenue growth (TTM) 9.23% 8.18% 8.64%
EPS growth (last fiscal year) 9.96% 144.33% —
Revenue growth, 5-year CAGR 10.54% (5.32%) 4.99%
Net income growth, 5-year CAGR 15.14% (0.90%) 0.00%

Health

Metric COST DLTR Discount Stores median
Debt to equity 0.17 0.86 0.39
Current ratio 1.07 1.13 1.03
Net debt to EBITDA (0.75) 0.74 0.59

Dividend

Metric COST DLTR Discount Stores median
Dividend yield 2.58% — 2.12%
Payout ratio 0.28 0.00 0.24

Size

Metric COST DLTR Discount Stores median
Market cap 396.68b 21.27b 16.44b

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