Is Costco Stock a Buy Now That It Competes With CVS and Walgreens?
Now that Costco Wholesale (NASDAQ: COST) is offering certain primary care services to its members, CVS Health and Walgreens Boots Alliance have a new competitor on the block. While its entry into yet another healthcare domain is unlikely to lead to a windfall overnight, it's undeniable that Costco's gargantuan scale and proven history of profitably catering to the whims of its customers imply good odds of its success in the long term.
But how does that factor into the decision about whether to buy its stock today or not? If anything, it makes the bull thesis even stronger. Here's why.
Costco's entry into providing primary care checkups and telehealth means that it's now competing with CVS and Walgreens in a total of four different healthcare markets. Aside from basic primary care, which CVS delivers at its MinuteClinics and Walgreens at its VillageMD locations, the wholesaler fills prescriptions, resells health insurance coverage, and sells consumer health products like Advil in bulk to its members. Given that there are nearly 128 million Costco cardholders globally, it could in theory siphon a massive amount of business over time from the big healthcare incumbents.
Source Fool.com
