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Costco Wholesale Corporation (COST) vs Deere & Company (DE): Which Is the Better Buy in 2026?

As of 2026-06-19, COST is overvalued at $951, with a DCF intrinsic value of $451 and a margin of safety of -111%. DE is undervalued at $589, with an intrinsic value of $1030 and a margin of safety of 43%. Of the two, DE has the wider margin of safety.

COST
Costco Wholesale Corporation
$951.45
VS
DE
Deere & Company
$589.24

Rewards

COST
  • ★Costco Wholesale Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Costco Wholesale Corporation scores 96/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
  • ★Free cash flow has grown at a 30.8% CAGR over the past 4 years, demonstrating strong earnings power growth.
DE
  • ★Free cash flow has grown at a 52.5% CAGR over the past 4 years, demonstrating strong earnings power growth.

Risks

COST
  • ⚠Gross margin of 12.9% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠Despite buyback spending, shares outstanding increased in 3 out of 4 years — stock-based compensation is offsetting repurchases.
  • ⚠FCF yield of 1.6% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
DE
  • ⚠FCF yield of 2.0% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
  • ⚠Trailing P/E of 33.3x is 87% above the historical average of 17.8x — the stock trades at a premium to its own history.
  • ⚠High leverage (3.08x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.

Key Valuation Metrics

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COST
DE
Valuation
$6.95B
Free Cash Flow
$3.23B
1.65%
FCF Yield
2.03%
47.98
Trailing P/E
33.33
42.05
Forward P/E
25.78
Quality & Moat
31.32%
ROIC
10.65%
29.15%
ROE
18.35%
12.88%
Gross Margin
25.96%
4.82
PEG Ratio
1.78
Balance Sheet Safety
Net cash
Net Debt / Equity
3.08
N/A
Interest Coverage
N/A
-0.07
Net Debt / EBITDA
4.60
0.60%
Dividend Yield
1.11%
COST: 5Ties: 1DE: 6
COSTDE

Historical Fundamentals

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COST

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

DE

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

$1 Retained Earnings Test

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COST
$19.41
created per $1 retained over 3 years
Exceptional Value Creator
Σ Retained
$9.28B
Δ Market Cap
+$180.14B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
DE
$-0.13
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$17.54B
Δ Market Cap
$-2.23B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Discounted Cash Flow (DCF) Analysis

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COST
110.9% Overvalued
Price is 110.9% above estimated fair value
Current Price: $951.45
Fair Value: $451.13
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
DE
42.8% Margin of Safety
Price is 42.8% below estimated fair value
Current Price: $589.24
Fair Value: $1029.59
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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COST

What growth rate is the market pricing in at $951?

+20.7%
Market-Implied Owner Earnings Growth
Standard FCF implies +22.8%

The market implies +20.7% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +22.8%, reflecting heavy growth investment.

DE

What growth rate is the market pricing in at $589?

+17.0%
Market-Implied Owner Earnings Growth
Standard FCF implies +23.1%

The market implies +17.0% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +23.1%, reflecting heavy growth investment.

Economic Moat Score

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COST
96/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
DE
50/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with margin stability as the key competitive advantage. Improving revenue predictability would strengthen the moat.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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COST
-2.65
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
DE
-2.52
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Ownership Breakdown

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COST
Insiders 0.2%Institutions 73.8%Retail & Other 26.0%
No. of Institutional Holders5,187
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
DE
Insiders 0.2%Institutions 82.8%Retail & Other 17.0%
No. of Institutional Holders3,298
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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COST
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises
DE
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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COST
1
Sells (3M)
12
Sells (12M)
Total value (12M): $18.18M
FRATES CATON
Officer
$695,100
@ $993.00 · 2026-04-01
ADAMO CLAUDINE
Officer
$732,205
@ $1003.02 · 2026-03-09
JONES TERESA A
Officer
$838,318
@ $986.26 · 2026-01-21
DECKER SUSAN LYNNE
Director
$437,390
@ $955.00 · 2026-01-16
KLAUER JAMES C
Officer
$1.41M
@ $939.00 · 2026-01-14
POLIT JAVIER
Officer
$2.26M
@ $866.38 · 2025-12-30
WILCOX WILLIAM RICHARD
Officer
$2.23M
@ $930.13 · 2025-11-07
ADAMO CLAUDINE
Officer
$2.53M
@ $935.68 · 2025-10-24
BARBRE TIFFANY MARIE
Divisional Officer
$1.16M
@ $934.91 · 2025-10-24
FRATES CATON
Officer
$1.40M
@ $910.02 · 2025-09-29
JONES TERESA A
Officer
$595,230
@ $992.05 · 2025-08-20
RUBANENKO YORAM B.
Officer
$3.90M
@ $974.96 · 2025-07-14
DECKER SUSAN LYNNE
Director
$536,058
@ $980.00 · 2025-06-18
CALLANS PATRICK J
Officer
$3.01M
@ $1002.77 · 2025-06-09
RIEL PIERRE
Officer
$2.03M
@ $1014.15 · 2025-06-06
KLAUER JAMES C
Officer
$3.92M
@ $981.07 · 2025-04-17
MILLERCHIP GARY
Officer
$1.03M
@ $940.01 · 2025-03-27
ADAMO CLAUDINE
Officer
$830,304
@ $922.56 · 2025-03-24
FRATES CATON
Officer
$765,213
@ $900.25 · 2025-03-18
VACHRIS ROLAND MICHAEL
Chief Executive Officer
$3.35M
@ $931.00 · 2025-03-11
GALANTI RICHARD ALAN
Officer and Director
$1.27M
@ $894.97 · 2024-10-24
JONES TERESA A
Officer
$717,236
@ $896.54 · 2024-10-23
RIEL PIERRE
Officer
$1.79M
@ $896.71 · 2024-10-15
CALLANS PATRICK J
Officer
$2.23M
@ $893.94 · 2024-09-30
ADAMO CLAUDINE
Officer
$2.84M
@ $888.99 · 2024-09-30
FRATES CATON
Officer
$1.50M
@ $883.35 · 2024-09-30
GALANTI RICHARD ALAN
Officer and Director
$868,962
@ $868.96 · 2024-08-15
DECKER SUSAN LYNNE
Director
$543,430
@ $876.50 · 2024-08-15
JONES TERESA A
Officer
$3,330
@ $832.50 · 2024-07-25
HINES DANIEL M
Officer
$2.54M
@ $846.37 · 2024-07-15
DENMAN KENNETH D
Director
$298,036
@ $851.53 · 2024-07-15
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
DE
0
Sells (3M)
3
Sells (12M)
Total value (12M): $32.47M
REED CORY J.
Officer
$6.12M
@ $510.00 · 2026-01-14
MAY JOHN C. II
Chief Executive Officer
$20.80M
@ $501.49 · 2026-01-08
MAY JOHN C. II
Chief Executive Officer
$5.55M
@ $500.08 · 2025-11-25
KALATHUR RAJESH
Chief Technology Officer
$12.30M
@ $500.61 · 2025-02-18
REED CORY J.
Officer
$5.05M
@ $377.63 · 2024-06-24
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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COST
FearGreed
😐Neutral(52/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
DE
FearGreed
😏Greed(61/100)

"Market is optimistic — be cautious and ensure you have a margin of safety"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

⚖️ Buffett Signal

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COST
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (52)
DE
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Greed (61)
View COST Full AnalysisView DE Full Analysis

Frequently Asked Questions: COST vs DE

Is Costco Wholesale Corporation or Deere & Company more undervalued in 2026?▼

Based on our discounted cash flow model, DE trades at a 42.8% margin of safety (intrinsic value $1030 vs. price $589), compared to COST's -110.9% margin of safety (intrinsic $451 vs. $951).

Which stock has a wider economic moat, Costco Wholesale Corporation or Deere & Company?▼

COST scores 96/100 (Wide moat), while DE scores 50/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is Deere & Company in financial distress?▼

DE's Altman Z-Score of 2.9 places it in the Grey zone, signaling elevated bankruptcy risk. COST scores 9.2 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.

Which company has better free cash flow, Costco Wholesale Corporation or Deere & Company?▼

Deere & Company (DE) generates a 2.0% free cash flow yield, compared to Costco Wholesale Corporation's 1.6%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.

Which stock has higher return on invested capital, Costco Wholesale Corporation or Deere & Company?▼

COST earns 31.3% ROIC versus DE's 10.7%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

Which dividend is safer, Costco Wholesale Corporation's or Deere & Company's?▼

DE's dividend earns a safety score of 94/100 (Very Safe), compared to COST's 85/100 (Very Safe). DE has raised its dividend for 3 consecutive years.