Costco‘s (NASDAQ: COST) stock has risen more than 600% over the past ten years. With reinvested dividends, it delivered a total return of 728%, easily beating the S&P 500‘s (SNPINDEX: ^GSPC) total return of 326%.
Investors might be reluctant to buy Costco’s stock after those massive gains. However, I believe it’s still the best blue chip stock to buy and hold for another ten years for three simple reasons.
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1. It’s still gaining and locking in more cardholders
Costco can afford to sell its products at low margins because it generates most of its profits from its recurring, higher-margin membership fees. So as long as it continues to add new cardholders and maintain high renewal rates, its profits will keep rising.
At the end of fiscal 2026 (which ended this August), Costco had 150.4 million cardholders. That’s up 3.6% from the previous year. Its worldwide renewal rate also rose 10 basis points year over year to 89.8% in the fourth quarter. That’s even more impressive when we consider that Costco only had 105.5 million cardholders at the end of fiscal 2020.
2. It’s still opening new warehouses
Costco ended fiscal 2026 with 939 warehouses, up from 914 at the end of fiscal 2025 and just 795 locations at the end of fiscal 2020. Costco’s ongoing store openings set it apart from many other brick-and-mortar retailers, which had to close more stores to stabilize their margins.
3. Its sales and profits are still rising
Meanwhile, other retailers become overly dependent on new store openings to boost their near-term sales. That strategy backfires when those newly opened stores can’t grow their sales past the first year. That’s why it’s important to look at a retailer’s comparable store sales (comps) — which typically only measure the sales growth of stores open for over a year.
In fiscal 2026, Costco’s comps rose 8.4% (6.6% on an adjusted basis, excluding fuel sales and forex). That marked its 17th consecutive year of positive comps growth.
From fiscal 2026 to fiscal 2029, analysts expect Costco’s revenue and EPS to grow at CAGRs of 8% and 10%, respectively. Its stock might seem expensive at 46 times this year’s earnings. Still, its scale, stickiness, and inflation resistance — which actually drives more cost-conscious shoppers to its stores — justify that higher valuation. That’s why I believe Costco’s stock will continue to outperform the S&P 500 for at least the next decade.
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Leo Sun 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.
