Microsoft also has a long history of rewarding investors with a steadily increasing dividend (more than 20 consecutive years of increases) and substantial share buyback programs. Although its return is less than 1%, this is partly due to the high performance of the stock (which has returned more than 130% over the trailing five years). If you want to buy, hold, and add to stocks over and over again over the years as you look to build a wealth portfolio, Microsoft looks like a great contender to consider.

The crux of costco‘s (NASDAQ: COST) The success is their membership model, where their annual recurring fees account for the vast majority of their operating profit. These fees provide a highly predictable, high-margin revenue stream that is largely insulated from the volatility typical of retail sales and economic downturns.

In fact, Costco maintains impressive membership renewal rates that regularly exceed 90% in the US and Canada. This loyalty is driven by the company’s commitment to offering high-quality products at extremely low prices, which incentivizes members to buy frequently and ensures a stable customer base.

By selling a limited selection of products in bulk and operating a highly efficient supply chain (eg, using warehouse stores for both retail and warehousing), Costco achieves large economies of scale and significant bargaining leverage over suppliers.

The savings are passed on to the customer. The ability to buy a wide range of items in bulk at lower prices than those available at other retailers is a compelling value proposition in all economic environments.

The company has a track record of generating strong cash flow, low debt and a healthy balance sheet. It has increased its regular quarterly dividend for more than 20 consecutive years and occasionally pays large special dividends to reward long-term shareholders.

Costco looks like a great stock to buy for investors looking to gain exposure to the retail space by investing in a profitable and resilient business. Its 150% total return over the past five years and consistent dividend history more than make up for its subpar yield of less than 1%.

Before you buy shares in Microsoft, consider this:

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Rachel Warren holds positions at Johnson & Johnson. The Motley Fool has positions in and recommends Costco Wholesale and Microsoft. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2026 $395 Microsoft calls and short January 2026 $405 Microsoft calls. The Motley Fool has one disclosure policy.

2 actions that could create lasting generational wealth was originally published by The Motley Fool