Market participants are rightly freaking out and question marks remain about how bad things may get. But, in the midst of the panic, companies like Costco stand as examples of a few highly defensive options that could see growth near-term.
That said, as far as safety and future dividend growth potential goes, Costco has the cash flow, with $3.1 Billion U.S. of cash flow last quarter alone. Costco also has an excellent balance sheet which warrants the company’s current valuation.
Expanding Costco’s private label serves to build market share and brand loyalty, two important long-term drivers of growth for any company in the grocery retail business. This is particularly true in the era we're now in, with technological disruption in the sector a real challenge for all players in the industry.