But there is much more to Costco than its 0.9% dividend. Here’s a look at why investors might want to look at Costco stock at a deeper level.

More growth

Costco’s recent dividend boost was a big acceleration over the company’s 8% dividend last year. The dividend’s greater growth, however, is not a surprise given the company’s momentum.

Costco’s revenue increased 13% over 12 months and its earnings per share went up by 16% over the past 12 months. Further, Costco’s sales for the five-week time frame closing on April 4 went upward by 16%, with its same-store sales also increasing 11%.

Management is also looking to maximize e-commerce. With its online sales being up by 76% year over year. And even as the economy starts back, Costco still witnessed 55% growth in online sales during the five-week time frame closing on April 4.

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Costco’s other dividend

But here is what investors usually miss about Costco. The company has sometimes paid out large special dividends on top of its normal dividends. In 2020 the company paid a $10 special cash dividend. This was 14 times bigger than its quarterly payments.

While management never guarantees it will pay a special dividend, the payday for investors has been an almost normal occurrence. With $5 to $10 special payments being made in 2012, 2015, 2017, and 2020.

With so many special payments paid since 2012 — it’s safe to bet that Costco’s sub-1% dividend does not do the company justice when it comes to dividend payout.

Even better, the company’s regular dividend makes up under 30% of the company’s earnings. Meaning there is a lot of room for further growth in Costco’s dividend — especially with its earnings going up.

Costco’s excellent momentum, history of dividend increases and special payments, and low payout relative to income make this the perfect long term dividend stock for people looking for income.

With more AI companies going public now, let’s find out some more about two 21st century AI companies and if now is the perfect time for you to start investing into this powerful sector.

1. Mohawk Group

Mohawk Group is a small firm worth under $1 billion. The company is an early user of AI for online retail. The company’s system is named Artificial Intelligence Mohawk E-commerce Engine or AIMEE for short. And it is using this software to find investment opportunities. Some of these seem bizarre to me. But that’s the great thing about AI. The robot does not care about our emotions or bias. It makes choices only based on the data it is given.

Following AIMEE, the company bought Aussie Health, a firm that makes Enema Coffee. And it’s bought Spiralizer, a company that makes devices that slices food. It also owns Truweo with its Posture Correction device. Why is the company buying this weird selection of consumer companies? Their AI is relying on search data from Amazon, online reviews, the amount of third-party partners, and various other data that tells the AI where to invest.

What makes the company even more exciting is that they also license the AIMEE platform to any third-party seller who wishes to subscribe to it.

And while AI is not without problems, this data-driven strategy might give Mohawk the leg up over its competitors. Already the firm has reached profitability in its recent quarter. And Mohawk expanded its top line by 62% y/y in Q4. Despite this profitability, Wall Street is only giving this AI superstar a small multiple of 2.5 times sales right now.

2. Upstart

Upstart is a company giving small loans to people in the range of $1,000 to $50,000 dollars. The firm runs no credit checks to do this. Instead, Upstart uses AI to analyze roughly 1,600 data points to determine your risk. And if approved for a loan, 99% of loans are given within 24 hours.

Upstart does not loan the money itself. Instead relying on banking partners. That, right now, includes Cross River Bank, which originated two-thirds of the company’s loans in 2020.

So far, business has been good. Over $9 billion in small loans have already been given on Upstart. And 71% of those are completely automated. That means no human was involved at all. The AI investigated all the data points and approves the loan.

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If it works, it will be an incredible business, one that completely changes the banking industry.

Upstart says it experiences 75% fewer defaults than traditional underwriting methods. To support this claim, the company did an internal study back in 2017, with hypothetical default rates.

So far, the sales are increasing nicely. The stock price boosted when the company reported its Q4 numbers. It was not only the 39% growth that got traders revved up. Upstart also raised their estimates for the first quarter. And it was a big increase, calling for revenue growth in the triple-digit range.

Using AI To Transform Everything

Upstart and Mohawk are both fast-growing companies using AI to give themselves an advantage. Both of them are transforming huge markets. If either makes major inroads, early stock owners should get amazing profits.

It’s difficult to grasp, but AMC Entertainment (AMC) is actually up since the beginning of this year, despite shut down theaters around the globe and an obvious shift into streaming media.

There are a many reasons for this rise, from optimism about a reopening and recovery to the completely speculative trading trend, but the fundamentals are the only thing that long-term investors should think about. And that is why you should stay far away from this stock.

The movies have changed

The past twenty years has seen a huge decline in box office sales that does not seem to be reversing course. The tickets sold in Canada and the States are down after their peak in 2002. This loss in movie goers has been offset by more expensive tickets, but there is a limit to how much theaters can charge.

To make things worse, home theaters are now better and cheaper and studios are creating relationships with streaming services for direct delivery of their content. The theater experience seems less needed than ever before for both movie creators and consumers, and that is bad news for AMC.

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The company’s balance sheet is in terrible shape

Even if AMC finds a way back to pre-pandemic numbers, the company is still not a good buy for investors. In 2019, the firm had a $149.1 million loss, and that was before COVID-19.

The company has also added over $1 billion in debt over the previous year and now has a total of $5.7 billion owed.

So operations are doing worse over the long-term, and the balance sheet is now more leveraged than ever before. These are not trends you want to see in a long-term investment.

Stay far away from this stock

AMC stock is red hot right now as Reddit traders have brought the shares up. Or it could be a bet on an economic recovery. But even after a recovery, AMC is not in a position to be worth investing in, and it absolutely is not a growth stock. That means you should avoid this stock at all costs.