Compare Stocks › COST vs HD

Costco Wholesale Corporation (COST) vs The Home Depot, Inc. (HD): 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%. HD is overvalued at $334, with an intrinsic value of $250 and a margin of safety of -34%. Of the two, HD has the wider margin of safety.

COST

Costco Wholesale Corporation

$951.45

The Home Depot, Inc.

$334.28

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.

★The Home Depot, Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
★The Home Depot, Inc. scores 87/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.

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.

⚠High leverage (4.48x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
⚠11 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.

Key Valuation Metrics

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COST

Valuation

$6.95B

Free Cash Flow

$10.13B

1.65%

FCF Yield

3.04%

47.98

Trailing P/E

23.72

42.05

Forward P/E

20.75

Quality & Moat

31.32%

ROIC

20.22%

29.15%

ROE

128.38%

12.88%

Gross Margin

33.13%

4.82

PEG Ratio

1.90

Balance Sheet Safety

Net cash

Net Debt / Equity

4.48

N/A

Interest Coverage

N/A

-0.07

Net Debt / EBITDA

2.49

0.60%

Dividend Yield

2.76%

COST: 3Ties: 1HD: 8

COSTHD

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.

$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

$-1.09

created per $1 retained over 3 years

Market Cap Declined

Σ Retained

$17.64B

Δ Market Cap

$-19.32B

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

Strongly undervalued

Fairly valued

Strongly overvalued

Fair Value: $451.13

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

33.5% Overvalued

Price is 33.5% above estimated fair value

Current Price: $334.28

Strongly undervalued

Undervalued

Fairly valued

Overvalued

Strongly overvalued

Fair Value: $250.30

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.

What growth rate is the market pricing in at $334?

+11.8%

Market-Implied Owner Earnings Growth

Standard FCF implies +16.8%

The market implies +11.8% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +16.8%, 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.

87/100

Wide Moat

70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. Margin Stability is the standout factor.

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.

-2.40

Unlikely Manipulator

Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

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.

Insiders 0.1%Institutions 76.1%Retail & Other 23.8%

No. of Institutional Holders5,106

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

Buys (3M)

Buys (12M)

No open market insider purchases found.

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

Buys (3M)

Buys (12M)

BRENNEMAN GREGORY D

Director

$999,767

@ $346.66 · 2025-03-14

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

Sells (3M)

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

Sells (3M)

Sells (12M)

Total value (12M): $23.56M

MCPHAIL RICHARD V

Chief Financial Officer

$940,670

@ $368.89 · 2026-03-04

DEATON JOHN A.

Officer

$661,617

@ $369.00 · 2026-03-04

ROSEBOROUGH TERESA WYNN

General Counsel

$1.00M

@ $348.52 · 2025-12-26

BROWN ANGIE

Chief Technology Officer

$695,948

@ $357.63 · 2025-12-12

BASTEK WILLIAM D

Officer

$974,445

@ $423.12 · 2025-09-12

ROSEBOROUGH TERESA WYNN

General Counsel

$2.27M

@ $413.23 · 2025-08-22

BASTEK WILLIAM D

Officer

$1.55M

@ $410.23 · 2025-08-22

DECKER EDWARD P.

Chief Executive Officer

$13.07M

@ $397.22 · 2025-08-21

BROWN ANGIE

Chief Technology Officer

$404,070

@ $404.07 · 2025-08-20

MCPHAIL RICHARD V

Chief Financial Officer

$1.36M

@ $403.66 · 2025-08-20

PADILLA HECTOR A

Officer

$640,609

@ $404.17 · 2025-08-20

DEATON JOHN A.

Officer

$3.29M

@ $369.99 · 2025-06-03

ROSEBOROUGH TERESA WYNN

General Counsel

$2.00M

@ $369.28 · 2025-05-28

SIDDIQUI FAHIM

Chief Technology Officer

$954,564

@ $367.14 · 2025-05-22

BASTEK WILLIAM D

Officer

$1.24M

@ $416.61 · 2024-11-22

HOURIGAN TIMOTHY A

Officer

$6.55M

@ $409.52 · 2024-11-18

ROSEBOROUGH TERESA WYNN

General Counsel

$9.03M

@ $408.91 · 2024-11-14

PADILLA HECTOR A

Officer

$1.48M

@ $408.96 · 2024-11-14

CAMPBELL ANN-MARIE

Officer

$12.24M

@ $408.40 · 2024-11-14

MCPHAIL RICHARD V

Chief Financial Officer

$2.65M

@ $408.45 · 2024-11-13

SCARDINO KIMBERLY R.

Officer

$617,100

@ $363.00 · 2024-08-19

ROSEBOROUGH TERESA WYNN

General Counsel

$1.87M

@ $359.32 · 2024-08-15

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

😐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.

😐Neutral(51/100)

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

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)

⚪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 (51)

View COST Full Analysis View HD Full Analysis

Frequently Asked Questions: COST vs HD

Is Costco Wholesale Corporation or The Home Depot, Inc. more undervalued in 2026?▼

Based on our discounted cash flow model, HD trades at a -33.5% margin of safety (intrinsic value $250 vs. price $334), compared to COST's -110.9% margin of safety (intrinsic $451 vs. $951).

Which stock has a wider economic moat, Costco Wholesale Corporation or The Home Depot, Inc.?▼

COST scores 96/100 (Wide moat), while HD scores 87/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Which company has better free cash flow, Costco Wholesale Corporation or The Home Depot, Inc.?▼

The Home Depot, Inc. (HD) generates a 3.0% 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 The Home Depot, Inc.?▼

COST earns 31.3% ROIC versus HD's 20.2%. 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 The Home Depot, Inc.'s?▼

COST's dividend earns a safety score of 85/100 (Very Safe), compared to HD's 69/100 (Safe). COST has raised its dividend for 0 consecutive years.