Costco's Multiple Competitive Advantages And Potential For Dividend Growth

This past year, I've been looking at the retail space to see how Amazon.com (Nasdaq: AMZN) is taking market share and customers. I've found that companies with clear competitive advantages have still grown sales successfully. These include investigations into TJX Companies (NYSE: TJX) and Starbucks (Nasdaq: SBUX).Meanwhile, two companies that must invest heavily in inventory, including Pep Boys (PBY) and Kohl's Corporation (NYSE: KSS), have had trouble growing Earnings Per Share. With AMZN growing sales at 20% per year, and with revenues at more than $74 billion, the investment community could see some major shakeups in retailers that are reliant on "brick and mortar" business models.The scope of this article will look at the financial health of Costco Wholesale Corporation (Nasdaq: COST), and the driving factors behind the competitive advantages of the company.First, let's see some metrics behind the company's performance:Five Year Financial Summary FYE 8/31/14FYE 9/1/13FYE 9/2/12FYE 8/28/11FYE 8/29/10Merchandise Sales(Millions of $)$110,212$102,870$97,062$87,048$76,255Membership fees(Millions of $)$2,428$2,286$2,075$1,867$1,691Net income per diluted share$4.65$4.63$3.89$3.30$2.92Increase in international comparable warehouse sales in local currency7%6%8%10%8%Increase in United States comparable warehouse sales5%6%7%7%4%Number of Warehouses (end of year)663634608592540At the end of 2014, COST warehouses contained 95.3 million square, including 68.1... Read more