Costco vs. Walmart vs. Amazon: Which Stock Is the Smartest Buy in 2026?
Written by Jack Delaney for The Motley Fool -> Costco, Walmart, and Amazon are all strong retail stocks. Amazon is riskier, but it has more upside thanks to its cloud business. Picking a winner depends on the goals and needs of a portfolio. Costco Wholesale (NASDAQ: COST) , W
Amazon is riskier, but it has more upside thanks to its cloud business.
Picking a winner depends on the goals and needs of a portfolio.
Costco Wholesale (NASDAQ: COST) , Walmart (NASDAQ: WMT) , and Amazon (NASDAQ: AMZN) have all carved out their own niche in serving retail shoppers. Walmart is known for low prices, Costco sells bulk items, and Amazon sells and ships pretty much anything you need.
As investments, they are also all unique in how they can fit into a portfolio. Finding the winner between the three comes down to holding periods and investing goals.
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Walking through a Costco is often described as being on a treasure hunt, with some members even sharing their shopping trips on social media. With its bulk deals and private-label Kirkland Signature brand, Costco has built a loyal following that helps it boast an impressive membership renewal rate. As of its fiscal Q3 2026, Costco's membership renewal rate in the U.S. and Canada was 92.2%, while its worldwide membership renewal rate was 89.7%.
Mostly known for its warehouse shopping experience , Costco is also seeing positive results from connecting more with its customers online. In the third quarter, e-commerce site and app traffic rose 37%, while digitally enabled comparable sales increased 21.5%. While the quarter was strong and the company generally met or slightly beat expectations, the report wasn't enough to impress investors, and the stock price has recently dipped. Costco is richly valued, with a forward price-to-earnings ratio of 43.1, so expectations are high.
Still, over the last five years, Costco has done well by its shareholders, with the stock climbing over 150%. It's also a dividend payer, and while that yield is on the smaller side at 0.6%, Costco is also known for paying out a special dividend from time to time. In 2024, the one-time special dividend payout was $15 per share.
