If Costco ruled corporate America we’d be richer—and happier
By Dian Vujovich
You know that I’m a fan of Costco. Wish I had purchased the stock years ago, but didn’t even though I shop there too many times a week to not see first-hand how popular the place is. While Costco’s stock price is one thing, what’s more impressive is the most excellent how-to example this company can provide to all of corporate America.
I’ve shopped at the North Lake Boulevard store long enough to see that Costco’s employees work hard, appear to be cross-trained, know where merchandise is located, are loyal employees and more often than not personable. Only twice have I run into any with thorny shouldn’t-be-working- there personalities. That’s pretty amazing when you consider what a lot of retail experiences are like these days.
So when you add hard work with well-trained employees and then throw in above average starting salaries—with a CEO who wants employees to be happy and have health insurance coverage— the outcome couldn’t be better for company determined to have staying- and profit-making power.
From where I sit, it’s a no-brainer to treat employees with respect and offer them good benefits, competitive salaries and a positive working environment if your goal is to make money. Doing so is such a simple recipe for success that hands-down would yield more than any corporate culture of greed ever could.
To see the proof in that pudding, all you’ve got to do is look at COSTs performance.
Long-term Costco investors have seen the stock move over 1,000 percent since it went public in 1986, according to a recent Yahoo Finance story. Compare that to the performance of the broader market, up 600 percent over that same time period, and COST’s price history has proven to be one of the best deals out there.
Within the past five years the stock has appreciated 130 percent. Over the past 52-weeks, its per share price has moved from about 93 bucks to 120.Yes, the dividend is puny—1.10 percent— and with a current P/E of over 25 and a current share price of $117 it’s a pricey bet and probably due for a correction. But what stock isn’t in this running-on-air bull market.
No matter what happens to this stock and in market in the near future, it would be great to see a COST stock split sometime soon. That hasn’t happened since 2000.
But enough of Costco stock talk: It’s the company’s corporate culture that’s really to be admired and copied.
In a time when most American’s are struggling financially, imagine the returns we’d all reap if Costco’s managerial practices were put into practice by a majority of employers. With plumper checks and happier workers, well… isn’t that really what America is all about?
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