Shares of Costco (NASDAQ: COST) outperformed many of the company's peers in the past year. Shares declined by less than the market did in 2022 even though the retailer's business could be hurt by a recession. Sales growth was already slowing heading into the core holiday shopping period.

But there is a lot more to a Costco investment than simply judging the company as an everyday retailer. Let's look at three big factors that might not be obvious at a glance, but that make the company an attractive choice for smart investors.

Costco's valuation doesn't make sense if you compare it to traditional retailers. Target (NYSE: TGT) stock is going for 0.7 times annual earnings right now compared to Costco's 0.9 times. The company even looks expensive compared to more successful retailers like Kroger (NYSE: KR), with its P/S ratio of 0.2.

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Source Fool.com