There's nothing like a good ol' barbecue! When I get out the grill, I like to focus on the five "big F's": friends, family, food, fun and financials. That's right, financials.

Those of us in the Wall Street world tend to look at things a bit differently. While I'm enjoying the smell of charcoal and grilled burgers, my brain is asking, "I wonder which companies stand to make a buck off my simple summer tradition?"

Just think about all of the retailers out there that sell propane tanks, grills, utensils, picnic tables, outdoor tents or gazebos, charcoal, and all of the other goodies that go part and parcel with America's barbecue season. Here is a list of companies that stand to profit:





Company


Market Capitalization*


YTD Return*


Lowe\'s
(NYSE:LOW)


$32.8 billion


-2.4%


Home Depot
(NYSE:HD)


$43.7 billion


-4.4%


Wal-Mart
(NYSE:WMT)


$230.7 billion


21.7%


Target
(NYSE:TGT)


$38.8 billion


-1.1%


Costco
(Nasdaq:COST)


$31.0 billion


flat


*Data as of market close June 24, 2008



Costco the Grill King
Washington-based Costco is my top pick among this group right now for several reasons. First off, Costco sells a variety of goods that barbecue lovers use including outdoor grills, smokers, and accessories. It also sells the increasingly fashionable outdoor "islands", which are basically outdoor kitchens. Don't forget that it also sells meats, buns, and all the other accoutrements that make a barbecue what it is, right down to the soda pop.

There's another reason why many consider Costco an attractive option, and that's because it sells items in bulk at a pretty good price. Given the rising cost of food and gas let's face it, we as consumers need every break we can get! Also, with some people choosing to stay local for their vacations this year, I think that there's a chance that sales of barbecue related paraphernalia could do well. (To learn how and why inflation happens, and how it can effect your investments, read The Importance Of Inflation And GDP and Shielding Your Portfolio From Inflation For Real Returns.)

Currently Wall Street expects that the company will earn $2.99 a share this year and $3.42 next. Over the next five year, Costco is expected to grow at a 13.67% pace. That's not too shabby. Finally the stock pays a small dividend. The current yield is 0.9%.

Bottom Line
Summer season is barbecue season, and although there are no guarantees, I think Costco should benefit from our great tradition this year.

Learn to take advantage of periodic trends in the equity markets with Capitalizing On Seasonal Effects.






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Tickers in this Article: COST, TGT, WMT, LOW, HD

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