Costco Wholesale: Long-Term Value Persists Despite 2026 Underperformance

Key Points

• Costco stock has underperformed the S&P 500 so far in 2026.
• Membership renewal rates in North America remain strong at 92.2%.
• The company pays a quarterly dividend and occasional special dividends, boosting total returns for long-term holders.

Costco Wholesale (NASDAQ: COST) has delivered steady returns in 2026, climbing 11.5% as of this writing. However, that gain trails the S&P 500‘s 13.7% return over the same period. Aside from an upcoming earnings report, the company lacks immediate catalysts to significantly drive the share price higher this year. Yet, short-term underperformance by a few percentage points is not a sufficient reason to disregard the long-term advantages of owning the stock.

Image source: The Motley Fool.

Owning Costco stock is for the long haul

While not entirely recession-proof, Costco is decidedly recession-resistant. Customer loyalty is well documented, evidenced by a 92.2% membership renewal rate across North America. Because the retailer sells necessities in bulk, consumers are naturally inclined to maintain their memberships even during economic downturns, providing a reliable revenue base.

Beyond consistent revenue generation, Costco returns capital to shareholders through a dividend. Although the yield is modest at 0.6%, the payout contributes to total return potential. Additionally, the company has a history of issuing special, one-time dividends every few years; the most recent was a $15 per share distribution in 2024.

Costco is scheduled to report its 2026 fourth-quarter earnings on Sept. 26. This event will likely dictate short-term price action for the stock, currently trading near $961 per share, determining whether it pushes toward $1,000 or pulls back toward $900.

However, the investment thesis rests on more than quarterly fluctuations. As a business generating reliable revenue, offering a growing dividend, and periodically rewarding shareholders with special payouts, Costco warrants consideration for long-term portfolios. While the stock has lagged the broader market recently, its three-year performance is roughly on par with the S&P 500 in both price and total return. Over five years, Costco’s total return of 115% significantly outpaces the index’s 87%. Over a decade, the gap widens dramatically: a 573% gain for Costco versus 321% for the S&P 500.

Clearly, a long-term horizon makes a substantial difference.

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