Costco (NASDAQ: COST) has a track record many investors would appreciate. The company has increased revenue, profit, and return on invested capital over time. And Costco stock has well surpassed the performance of the S&P 500 Index. For instance, Costco has climbed nearly 200% over the past five years, while the S&P 500 increased 48%.

In spite of difficult economic times, Costco continues to report strong earnings. Net sales for the fiscal year ended Aug. 28 climbed in the double digits. And net income reached more than $5.8 billion. Can this strength continue? Let's check out one green flag for Costco -- and one red flag.

To shop at Costco, you have to pay an annual membership fee. The basic fee is $60. For double that, you get an executive membership and various benefits that go along with it. The great news for Costco is that membership keeps on growing.

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Source Fool.com