Struggling to achieve retirement goals is a reality for many Americans. Here are two stocks recommended for long-term investment to potentially boost those retirement savings.
In the world of investment, both Costco and Amazon present compelling long-term prospects for retirement planning. However, these two giants have distinct profiles and considerations that investors should take into account.
Costco
Costco, with its membership model, demonstrates stable, consistent growth. The company boasts approximately 80 million paying households and a renewal rate close to 93% as of 2025. This membership base provides reliable recurring revenue. Financially, Costco has shown solid performance, with an 8% sales increase in Q3 2025 and same-store sales growth around 5.7%. The company's e-commerce sales are also on the rise.
Despite a high trailing P/E ratio (56.07), analysts see room for growth. The average price target is around $1,061, and there is a consensus Buy rating. Costco also pays a modest dividend (~0.5% yield), but with a long history of steady dividend increases (about 13% annual growth recently), plus occasional special dividends, it highlights its potential for reliable income growth over time.
Costco's business model is considered resilient to economic and tariff-related pressures, making it a viable choice during inflationary periods. Institutional ownership and insider activity suggest stability but no aggressive buying, implying investors should focus on long-term operational strength for gains.
Amazon
Amazon, despite some weakness in 2025's stock performance, continues to garner the support of 90% of analysts who maintain Buy ratings. This is due to its strong scale and long-term growth prospects, especially in cloud computing and e-commerce. However, Amazon's AWS division faces competitive pressure in AI cloud services, which has affected the stock price recently. This signals potential near-term volatility but also opportunity if Amazon maintains or grows its leading market position.
Amazon does not typically pay dividends, focusing its capital on reinvestment and growth, which may appeal more to growth-oriented investors rather than those seeking income.
| Aspect | Costco | Amazon | |----------------------|---------------------------------------|------------------------------------------| | Business Model | Membership retail warehouse | E-commerce, cloud computing (AWS) | | Market Position | Strong, stable with high renewal rate | Leading in e-commerce and cloud, competitive AI pressure | | Dividend | Yes, modest yield (~0.5%), steadily growing | None, reinvests earnings to grow | | Valuation | High P/E (~56), premium but growth potential | Variable, currently under pressure but strong rating | | Analyst Sentiment | Consensus Buy, price target ~$1,061 | 90%+ Buy, viewed as long-term growth stock | | Risk Factors | Tariffs affecting retail, high valuation | Competition in AI cloud, short-term volatility |
Summary for Retirement Planning
Costco is attractive for retirement portfolios prioritizing income growth and stability, supported by its solid dividend track record and durable business model. Amazon fits investors seeking long-term capital growth from a global platform in ecommerce and cloud, accepting more near-term volatility and no dividend income. A diversified allocation combining both could balance growth and income, with Costco providing steady dividends and Amazon offering capital appreciation potential.
Your investment choice should consider your risk tolerance, need for income versus growth, and investment horizon within your retirement plan. It's worth noting that Amazon's cloud computing services are driving an estimated $2 trillion in global sales by 2030, and Amazon's stock has the potential to continue growing over the coming decades. Additionally, Amazon's ad sales are now the company's fastest-growing business segment.
- Costco's membership model and reliable revenue from its large, consistent customer base make it an appealing choice for investors prioritizing income growth and stability within their personal-finance strategies.
- Amazon, due to its strong long-term growth prospects in e-commerce and cloud computing, is a more suitable option for investors seeking capital growth, despite potential near-term volatility and the lack of dividend income.
- Prospective investors should consider their risk tolerance, need for income versus growth, and investment horizon when deciding whether to invest in either Costco or Amazon as part of their retirement planning, with a balanced, diversified allocation potentially providing a combination of steady dividends and capital appreciation.
