Costco stock
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The gist
Costco shares rose 1.9% to $971.61 on a Medicare pilot with SCAN reaching 5 million enrollees.
The move signals Costco's push into healthcare, but its rich valuation and flat 12-month.
Background
Costco Wholesale announced a collaboration with SCAN Group, a nonprofit insurer, to offer co-branded Medicare Advantage plans in two states and a Medicare supplement plan in a third, covering about 5 million Medicare participants. The plans are pending regulatory clearance and no rollout timeline has been provided. This news comes as Costco's stock has been flat over the past year, trading at a high P/E ratio of about 48 times trailing earnings, despite strong sales growth.
How it unfolded
- Apr 15, 2026Costco raised its quarterly dividend from $1.30 to $1.47 per share, a 13.1% increase.
- Aug 17, 2026July net sales reported at $23.12 billion, up 10.7% year-over-year, but growth rate barely moved from June's 10.6%.
- Aug 18, 2026Costco shares gained 1.9% to $971.61 after news of the Medicare pilot with SCAN, targeting 5 million enrollees.
- Aug 19, 2026Analysts note Costco looks fully priced despite a 121.2% total return over five years, with P/E well above sector averages.
- Aug 21, 2026Costco's dividend increase and healthcare move continue to be discussed, with some analysts recommending other pharma stocks instead.
Who’s saying what
- Analysts
- Costco's valuation is rich, trading at about 48 times trailing earnings, which narrows the margin of safety for new capital.
- Bulls
- Costco's membership fee engine and steady low-double-digit growth support long-term compounding, making it a buy for long-term holders.
- Bears
- The stock has been flat over the past 12 months, losing about 2%, and is consolidating gains after doubling over five years.
Still unverified
The specific states for the Medicare pilot and the rollout timeline have not been identified by Costco. The plans are still awaiting regulatory clearance.