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In an uncertain, volatile, and heavily inflated market everyone is looking for a safe investment with a strong amount of potential for growth. Perhaps one of the best strategies in doing this is by selecting companies, which possess earnings that are not adversely affected by poor market performance, but rather, show strong growth in times of uncertainty. The uncertain marketplace is the ideal environment for discount retailers to thrive. That is why Costco (NASDAQ:COST), the membership warehouse giant, is a strategic purchase for those who fear that the market will perform poorly in coming months.

Costco Wholesale Corp. has been an excellent value play for investors over the course of the last 12 months, growing 19.43% year-to-date and showing strong financials as well as growing revenue. The retail giant pays out 0.31 per share and also maintains an EPS of over $4.54. Additionally, unlike its greatest competitor, Wal-Mart Stores Inc. (NYSE:WMT), Costco is not dealing with the issues of overextending its franchise too widely, which means its "Good-To-Great" style business model of slow but progressive growth, could steadily be taking effect. In addition, due to Costco's efficiency, the retail giant is often able to minimize its inventory by the end of each quarter, meaning that by the time Costco has to pay its suppliers, the majority of their significant inventory has by then been sold. By doing this, Costco retains a steady gross margin rate and healthy financials. Another factor to take note of are Costco's low operating expenses, which eclipse those of any other retail giant in the sector. The way in which Costco achieves this is through its method of reducing costs as a means of generating more traffic. Costco's business model is to place traffic over raising prices, by making a tiny profit margin on each item, the assumption is that consumers will be more likely to go to Costco than any other giant retailer.

In terms of prospective growth, the company is obviously no longer a high-growth short-term play by any means. Its earnings are only slightly outpacing its single-digit revenue growth and administrative issues related to securing massive plots of real estate and building new warehouses have placed a cap on its future growth in domestic markets. That being said, Costco currently operates approximately 625 warehouses, with more than 90% located in North America. With revenues and earnings steadily rising, the company has already stated plans to open around 30 additional warehouses each year for an undefined amount of time, which justifies the company's high multiple.

The remaining 10% of Costco's warehouses are distributed internationally in various countries such as the U.K., Japan, Taiwan, Korea, and Australia. This international market represents a huge area of growth in the long term. In addition, the company is seeking to enter continental Europe, a key location for the retailer. Currently, continental Europe for the most part lacks massive retailers such as BJ's Wholesale or Costco. This region is a primed market for companies such as Costco to operate in due to the financial uncertainty and the general high costs of living. Keeping that in mind, thus far, the retailer's international growth has been substantially more rapid than its growth in domestic markets. Looking at the average revenue growth over the past four years, the company's international revenues have increased by nearly 15% annually; this revenue growth is more than double that of the United States. The total revenue contribution of international sales has in turn increased from 18% in 2008, to 22% in 2011 and Trefis projects that this number will increase significantly to around 30% by 2018.

As analysts become skeptical of the future outlook of the market, perhaps considering an investment in a company such as Costco can be a rewarding solution regardless of the market's general condition. Costco has consistently outperformed markets and will continue to do so for many years to come. People should not be deterred by the high price tag the position currently costs, but should instead consider this as a long-term position. If Costco continues to expand to international markets it could easily increase the amount of revenue from international sales many times over. If this happens, it would be safe to say that Costco's multiple is justified.

Out of a total of 28 analysts, 13 have ranked it a buy, 13 have ranked it a hold, and only one analyst believes it will outperform.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in COST over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Costco, A Safe Bet For Rising Interest Rates?