This week’s Stock of the Week is an enormous business that’s expanding while keeping customers happy.

Powerful Retailer

Costco Wholesale Corporation (COST) has an enormously successful brick-and-mortar strategy that protects it against competition from even the strongest online firms.

It operates 750 membership warehouses, including more than 500 in the US, and gets essentially all its profit from the annual fees paid by its 90 million members. Costco sells goods at cost plus cost of overhead, much of it in large sizes or quantities—a system with which Amazon and other online firms cannot easily compete because selling large and heavy items disproportionately raises their processing and shipping costs.

Costco members tend to be savvy shoppers who go there for low-cost fuel and merchandise. Costco is also involved in travel, car sales and even business services. The membership renewal rate is 90%, indicating high customer satisfaction with the business model. And Costco is expanding outside the US, with more than 90 warehouses in Canada and several dozen each in Mexico, the United Kingdom and Japan. Revenue was $129 billion last fiscal year and will likely rise to $139.7 billion in fiscal 2018 and $149.6 billion in fiscal 2019. The dividend of $2.28/share/yr. recently yielded 1.1% and appears secure.

Fiscal year: August. Earnings per share: 2019 est./$7.73…2018 est./$6.94…2017/$5.89.

Andrew A. Arons is managing partner, Synergy Advisory Management Group LLC, Hackensack, New Jersey, which manages $160 million.