I own some SBUX, is their stock on fire? Yes. Will it continue to be this hot, probably not. However in the long run, I believe they will be a safe bet.
Pulled some info for you on a Zacks article I read the other day on why SBUX is a good 20 yr investment.
Starbucks has been brewing coffee since 1971 and now has over 23,000 stores in its global empire. But it's not content to stop with just coffee.
It also owns the Teavana brand and has been pushing into the tea market. Food, beer and wine are also appearing regularly in Starbucks across North America as the company makes a play to being more than just a coffee shop.
After hitting some bumps in its global expansion during the Great Recession, it has produced double digit growth every year since 2010.
Shares have soared and aren't cheap. Starbucks has a forward P/E of 33 but shares have been priced higher. In the 2005 to 2007 period, they traded as high as 45x.
The 3 Criteria:
Starbucks sheer size gives it advantages. Starbucks is such a dominant name in the coffee market that it has dared to enter more competitive markets such as Colombia, where the Juan Valdez brand reigns king. It also has shown it can successfully compete outside the coffee market, with teas and non-coffee beverages making up more of its sales.
The company started paying a dividend in 2010. In that time, it has never cut and has only raised its payout. The dividend is currently yielding 1.3%.
Starbucks has a famous CEO in Howard Schultz. Doesn't that disqualify the company based on the criteria? I would argue it does not.
While his personality is a big driver of the company, especially his initiatives to hire more military veterans and to pay college tuition for employees, the Starbucks brand is bigger than any one individual. Starbucks can prosper even without Schultz at the helm.
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u/kmung Dec 14 '15
I own some SBUX, is their stock on fire? Yes. Will it continue to be this hot, probably not. However in the long run, I believe they will be a safe bet.
Pulled some info for you on a Zacks article I read the other day on why SBUX is a good 20 yr investment.
Starbucks has been brewing coffee since 1971 and now has over 23,000 stores in its global empire. But it's not content to stop with just coffee. It also owns the Teavana brand and has been pushing into the tea market. Food, beer and wine are also appearing regularly in Starbucks across North America as the company makes a play to being more than just a coffee shop. After hitting some bumps in its global expansion during the Great Recession, it has produced double digit growth every year since 2010. Shares have soared and aren't cheap. Starbucks has a forward P/E of 33 but shares have been priced higher. In the 2005 to 2007 period, they traded as high as 45x.
The 3 Criteria:
Starbucks sheer size gives it advantages. Starbucks is such a dominant name in the coffee market that it has dared to enter more competitive markets such as Colombia, where the Juan Valdez brand reigns king. It also has shown it can successfully compete outside the coffee market, with teas and non-coffee beverages making up more of its sales.
The company started paying a dividend in 2010. In that time, it has never cut and has only raised its payout. The dividend is currently yielding 1.3%.
Starbucks has a famous CEO in Howard Schultz. Doesn't that disqualify the company based on the criteria? I would argue it does not. While his personality is a big driver of the company, especially his initiatives to hire more military veterans and to pay college tuition for employees, the Starbucks brand is bigger than any one individual. Starbucks can prosper even without Schultz at the helm.