There's No Denying Macy's Is a Great Buy Now, but This Stock Could Be an Even Better Buy Over the Next 10 Years

Costco's value pricing continues to attract and retain members.

Investors often face choices. Sometimes, it comes down to two good stocks. In that case, you have to pick which one you think will do better.

Macy's (NYSE: M) has been successfully executing its turnaround plan, including focusing on selling luxury items. Its same-store sales (comps) have been growing across its brands, and the shares have rewarded investors. The retailer's stock price gained 15.2% this year through Aug. 10, besting the S&P 500 index's 13.3% appreciation.

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However, while that's certainly good news for those who purchased Macy's stock, I prefer Costco Wholesale (NASDAQ: COST) as a long-term investment.

Costco has a different business model from most retailers. That's because it charges people an annual fee to become members and shop at its warehouses.

With its high-quality goods and low unit prices (including supersized items), it consistently grows and retains members. It's not easy to build and keep customers, but it's the key to Costco's success. With the company's value proposition, there's no reason to think people will suddenly drop their memberships.

Renewal rates continue to hover around 90%, including in the fiscal third quarter, which ended on May 10. Costco had 82.9 million paid members, an increase from 82.1 million on Feb. 15.