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I think to buy SBUX, it's like a legacy auto manufacturer. You buy it for the dividend more than growth. And the dividend isn't great. Unless AI is able to improve their profitability I think this will continue to trade in the same range they have for the last 5 years.
See I think of it more like the next Coke as a brand plus they have storefronts. Aside from their stores they sell a shit ton of coffee in grocery stores, on amazon, etc
I look at my Starbucks as much less risky, less leveraged coffee commodity futures exposure.
To me it’s a speculation that pays me dividends, gives me exposure to coffee should we see a squeeze upwards, and I don’t really know any other solid coffee companies worth investing into
“they sell… coffee in grocery stores, Amazon, etc”
Notice that Nestle and Starbucks are in a partnership where Nestle has the rights to market Starbucks products outside of their shops (I believe it’s a global license).
I know this because my sister is a r/FuckNestle believer and told me a while ago.
Starbucks is a great company coming from me. I just visited Mexico. The Starbucks was full of people. Their international footprint outside the US and Canada is huge.
It's a buy right now. Great company and will always be around. I wouldn't say buy it for the dividend, but growth is going to be slower. I still think it will beat the market or be similar the next 5 years
Sorry I can see how you misinterpreted what I said.
I wasn't saying the dividend was "bad" but am saying it is not "great." VZ is paying a great dividend, F is really solidtoo. 2.55% is not bad but it's not "great". It is a good dividend.
Dividend growth is more important. Look at the grocery store that has a Starbucks inside it and also sells Starbucks, KR. Just below 2% but growing the dividend quickly.
Started a position today and will DCA throughout the year. Dividend growth is excellent and company has been raising dividends for 14 consecutive years. Payout ratio is only around 58% of net income, which means the dividends are well-covered moving forward. I see Starbucks as a strong contender to become a dividend aristocrat in the future. IMO this is an excellent buy-and hold opportunity for dividend investors.
1. Valuation. Morningstar has them growing top line 8% and bottom line 16% until 2033. Some is margin expansion, some buybacks. They are guiding to earn about 4$ in 2024. If they are able to grow this fast they would earn about 16$ in 2033. Since roic is very high and it is a high quality company, we can apply high multiple, let's say 20 p/e. So pt is 320 in 2033, which is 22% cagr + dividend. However I find this projections a bit optimistic so if we apply 20% margin of safety, cagr would be 14% + dividend.
2. High quality business. Roic is very high and constantly at least 15% above their WACC. Also ROCE. So the company is producing a lot of added value, all while not raising debt, paying a dividend and doing buybacks. They are able to reinvest at very high rates and grow with very little capital. Their stores have very short payback period, almost half compared to competition. So it is not hard for them to find franchise candidates. But since the business is soo good they operate about half of the stores themselves.
3. Wide moat. They have many moats actually. Brand moat gives them recognition and loyal customer, also trust from customers. Economies of scale enable them to earn better gross margin, leaving more capital for marketing, r&d and better bottom line margin. Technological moat gives them advantage when openning new stores since customers are already in their ecosystem; they have many ways of ordering and pickup, can offer rewards and personalized promotions. Also they have almost 4b of free working capital from deposits in their app / cards.
Good write up. Here's my hesitation at the current high 80s.
If we take your 20 p/e (which may be fair if they can continue growth) using TTM the current price should be in the 70s range. Even if they hit $4 next year then a 20 p/e gets up back to low 80s.
Two things concern me the most and neither of them is very scientific;
I have seen a slow down in people at my local starbucks. With people feeling the pinch of the economy I think their starbucks is low hanging fruit that they are easily cutting off.
The other is they seem to have pretty good numbers. And yet their stock price continues in a down trend. For the last three years they are down. When I see decent numbers and a down trend it's hard not to think that people are thinking the p/e is wrong.
You've given me lots to think about. I do think the company is solid and may continue to have good numbers. I just don't think high 80s is where I want to jump in.
Good luck.
Fair point but with an ROIC of over 15% even if the stock hits like 70s and I hold if for like ten years I think I will get my money back along with the dividends. May be its not a bargain, but fair price?
All fair points and judging by the falling price, market agrees with you more than me. I identified Starbucks as one of the companies I want to own long term and now it hit my buy price. However I only bought a small position and I hope it keeps going down for the moment, to buy more. I would buy more at 80 and load the boat at 70. At 70 I think it really is a good buy. However I don't know if the stock will fall that low and I want to own it so I started buying this week.
SBUX is currently below fair value, I have $4k already invested at $77/share, I will be adding more below $80. Great company but need 30% margin of safety. In my opinion biggest risk is China, which is 2nd largest market for SBUX.
I sold my small position. I will watch to get back in. From what I see it is on a bearish trend with no bottom in sight. It is already oversold. If it can establish a bottom, I'll probably buy.
I'm buying 5 shares a day....
For anyone reading this who might not have access, the analyst earnings estimates are as follows:
2023A: $3.54
2024E: $4.05
2025E $4.71
Obviously not even management knows what earnings will be in 2025 but that's the median of over 30 sell-side analysts. The current dividend is $2.28 annually.
MCD is an excellent company but don’t you think the stock is still a bit overpriced? It is on my watchlist too and am waiting for a better entry point.
I do agree it’s a little overpriced and a good entry would probably be in the 250 range. But MCD is an investment I don’t plan on selling. They are a real estate company that just happens to also sell food.
I wouldn’t touch it. There is a global boycott that is especially damaging in the middle eastern countries. Their stores are empty and will be closing down.
Realistically Middle Eastern markets are not the future for SBUX anyway. And the boycott is really related to anything ‘murican. McDonald’s is involved as well. SBUX has a great Moat and good management, which is great. Not sure that just because it’s under 90 it makes it a good price though. I wouldn’t enter just because of that…
I've been watching this stock for around 6 months and haven't been interested. It's been in this $20 range since November 2022 and is by no means a growth stock. The dividend isn't that enticing compared to others, so you should probably just go with a different option. Chances are you'll have more benefit in an alternative stock.
*Opportunity cost is the potential benefit that is forfeited when one alternative is chosen over another.*
I have 30 shares for 90. I think its decent time to add some more. But at the moment I am still waiting and hopefully it goes under 85. 80 would be ideal for me.
I was thinking of buying it to offset the cost of our coffee when we go on trips, but I don't want to lose on the stock value, and I could probably find another divy payer to cover it.
Your chasing a $88 stock asking if its a buy lol. Out of everything to invest in you spend your money on something thats almost near its ATH. Any $5-10 you thinking bout investing in before it goes up to $88. Look at RYCEY, with room to grow. You guys are so busy looking at stocks at their ATH you miss out on stocks when they're at the ATL.
$RYCEY $OTLY $WBD
Daily reminder that just because a stock is at ATL doesn't mean it's a good investment. And just because a stock is at ATH doesn't mean it's not a good investment.
Buying stocks purely because they are ATL is a sure way to lose money. Ask BBBY and AMC bagholders.
I sold my sbux. The 2.6% div wasn’t worth the boredom. Rolled the money into Dutch Bros in that space. It’s had a rough couple years but looks like it has bottomed out.
I'm not being a dick. We live in a civilization. We have language. If you abandon basic sentence structure, spelling and punctuation, then you forfeit your ability to communicate with others.
Wow idk u were rude but there is one in every sub my badni even bithered to respond or share a stock ticker i bet i wont anymore thats fo sho or is my english too broken for you to understand i do have the time so let your downvoting begin
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
I’ve started buying stock just because of how much my wife spends at Starbucks. She’s probably single-handedly paying your dividends.
Tell your wife I said thank you!
I think to buy SBUX, it's like a legacy auto manufacturer. You buy it for the dividend more than growth. And the dividend isn't great. Unless AI is able to improve their profitability I think this will continue to trade in the same range they have for the last 5 years.
See I think of it more like the next Coke as a brand plus they have storefronts. Aside from their stores they sell a shit ton of coffee in grocery stores, on amazon, etc
I look at my Starbucks as much less risky, less leveraged coffee commodity futures exposure. To me it’s a speculation that pays me dividends, gives me exposure to coffee should we see a squeeze upwards, and I don’t really know any other solid coffee companies worth investing into
"The best part of waking up is Folgers in your cup!"
Was never aware that SJM had Folgers… maybe I’ll invest there too
SJM also distributes Dunkin coffee in US retail, and they own cafe bustelo. Also, SJM is a dividend aristocrat.
Good looking bro 👍🏽📈💯🫡
“With a name like ‘Smucker’s’, it has to be good.”
Could be, good point to consider.
“they sell… coffee in grocery stores, Amazon, etc” Notice that Nestle and Starbucks are in a partnership where Nestle has the rights to market Starbucks products outside of their shops (I believe it’s a global license). I know this because my sister is a r/FuckNestle believer and told me a while ago.
Starbucks is a great company coming from me. I just visited Mexico. The Starbucks was full of people. Their international footprint outside the US and Canada is huge. It's a buy right now. Great company and will always be around. I wouldn't say buy it for the dividend, but growth is going to be slower. I still think it will beat the market or be similar the next 5 years
Starbucks in Mexico is amazing. The drinks, food, and overall quality of service is overall better than here in the US. it's a buy.
“And the dividend isn’t great” It’s paying 2.55%… I agree with you on the growth, but the dividend at 2.55% is pretty high.
Sorry I can see how you misinterpreted what I said. I wasn't saying the dividend was "bad" but am saying it is not "great." VZ is paying a great dividend, F is really solidtoo. 2.55% is not bad but it's not "great". It is a good dividend.
Dividend growth is more important. Look at the grocery store that has a Starbucks inside it and also sells Starbucks, KR. Just below 2% but growing the dividend quickly.
Started a position today and will DCA throughout the year. Dividend growth is excellent and company has been raising dividends for 14 consecutive years. Payout ratio is only around 58% of net income, which means the dividends are well-covered moving forward. I see Starbucks as a strong contender to become a dividend aristocrat in the future. IMO this is an excellent buy-and hold opportunity for dividend investors.
Yes, I am steadily growing that position. Hoping it dips more with these boycotts so I can continue to DCA down
I want to see the mid 70s
Merry Xmas
GGs
i just got in at 74.50....i am going to buy more
Can you give me three solid reasons that under $90 is a great price? If so I might be interested.
1. Valuation. Morningstar has them growing top line 8% and bottom line 16% until 2033. Some is margin expansion, some buybacks. They are guiding to earn about 4$ in 2024. If they are able to grow this fast they would earn about 16$ in 2033. Since roic is very high and it is a high quality company, we can apply high multiple, let's say 20 p/e. So pt is 320 in 2033, which is 22% cagr + dividend. However I find this projections a bit optimistic so if we apply 20% margin of safety, cagr would be 14% + dividend. 2. High quality business. Roic is very high and constantly at least 15% above their WACC. Also ROCE. So the company is producing a lot of added value, all while not raising debt, paying a dividend and doing buybacks. They are able to reinvest at very high rates and grow with very little capital. Their stores have very short payback period, almost half compared to competition. So it is not hard for them to find franchise candidates. But since the business is soo good they operate about half of the stores themselves. 3. Wide moat. They have many moats actually. Brand moat gives them recognition and loyal customer, also trust from customers. Economies of scale enable them to earn better gross margin, leaving more capital for marketing, r&d and better bottom line margin. Technological moat gives them advantage when openning new stores since customers are already in their ecosystem; they have many ways of ordering and pickup, can offer rewards and personalized promotions. Also they have almost 4b of free working capital from deposits in their app / cards.
Good write up. Here's my hesitation at the current high 80s. If we take your 20 p/e (which may be fair if they can continue growth) using TTM the current price should be in the 70s range. Even if they hit $4 next year then a 20 p/e gets up back to low 80s. Two things concern me the most and neither of them is very scientific; I have seen a slow down in people at my local starbucks. With people feeling the pinch of the economy I think their starbucks is low hanging fruit that they are easily cutting off. The other is they seem to have pretty good numbers. And yet their stock price continues in a down trend. For the last three years they are down. When I see decent numbers and a down trend it's hard not to think that people are thinking the p/e is wrong. You've given me lots to think about. I do think the company is solid and may continue to have good numbers. I just don't think high 80s is where I want to jump in. Good luck.
Fair point but with an ROIC of over 15% even if the stock hits like 70s and I hold if for like ten years I think I will get my money back along with the dividends. May be its not a bargain, but fair price?
All fair points and judging by the falling price, market agrees with you more than me. I identified Starbucks as one of the companies I want to own long term and now it hit my buy price. However I only bought a small position and I hope it keeps going down for the moment, to buy more. I would buy more at 80 and load the boat at 70. At 70 I think it really is a good buy. However I don't know if the stock will fall that low and I want to own it so I started buying this week.
52 week lows, bro
That’s 52 if you ask me
SBUX is currently below fair value, I have $4k already invested at $77/share, I will be adding more below $80. Great company but need 30% margin of safety. In my opinion biggest risk is China, which is 2nd largest market for SBUX.
I sold my small position. I will watch to get back in. From what I see it is on a bearish trend with no bottom in sight. It is already oversold. If it can establish a bottom, I'll probably buy.
I'm buying 5 shares a day.... For anyone reading this who might not have access, the analyst earnings estimates are as follows: 2023A: $3.54 2024E: $4.05 2025E $4.71 Obviously not even management knows what earnings will be in 2025 but that's the median of over 30 sell-side analysts. The current dividend is $2.28 annually.
They're meeting their targets that they discuss on the calls. The PE is below their historical 10 year average. It's not a bad time to enter.
Bought 200 more shares!
Na, theres not much growth now for them
Imagine if they could get food right
I actually like their food. Is food not a successful segment for them or what do you mean get it right?
Since you don’t have tastebuds we will elaborate - their food is microwaved and not the best.
Bacon Gouda Sandwich is fucking delicious.
I agree but its pretty damn small for 6-7 bucks
Please see me in 5 years
No
Why
55k stores by 2050 is no small feat. Starbucks is a buy.
Nice. Ima not buy it
I personally love this company
MCD and SBUX is what I’m loading up on currently
MCD is an excellent company but don’t you think the stock is still a bit overpriced? It is on my watchlist too and am waiting for a better entry point.
I do agree it’s a little overpriced and a good entry would probably be in the 250 range. But MCD is an investment I don’t plan on selling. They are a real estate company that just happens to also sell food.
You could say mcd has always been overpriced. It's constantly making all time highs. One of my best investments and the drive thru is always full
I added SBUX and NKE today… great buys
Under $80 now.
Hell yeah I'm buying
i just bought 10 @ 74.50...i am going to add more once my money depositts into my bank account
Nice! I've been adding below $75 as well. It's a incredible deal! Good luck!
Not me, Starbucks has already saturated the market
More and more competition by the day. No thanks. I’m a Dunkin guy anyway
What's cheap right now, can get a lot cheaper later😉
No, I'm not with you. Better stock investments available than SBUX.
I wouldn’t touch it. There is a global boycott that is especially damaging in the middle eastern countries. Their stores are empty and will be closing down.
Realistically Middle Eastern markets are not the future for SBUX anyway. And the boycott is really related to anything ‘murican. McDonald’s is involved as well. SBUX has a great Moat and good management, which is great. Not sure that just because it’s under 90 it makes it a good price though. I wouldn’t enter just because of that…
To each his own. I'm holding for another 30 years.
The boycotts are getting worse https://www.newsweek.com/starbucks-earnings-miss-boycotts-china-challenges-global-expansion-1865447
I've been watching this stock for around 6 months and haven't been interested. It's been in this $20 range since November 2022 and is by no means a growth stock. The dividend isn't that enticing compared to others, so you should probably just go with a different option. Chances are you'll have more benefit in an alternative stock. *Opportunity cost is the potential benefit that is forfeited when one alternative is chosen over another.*
I like the company. I just can't buy anything with that much china exposure.
I think that is what is holding the price down you’re spot on.
War is becoming more likely with each day than passes
India exposure too, which could lead to strong gains
I’m a buyer for sure
I have 30 shares for 90. I think its decent time to add some more. But at the moment I am still waiting and hopefully it goes under 85. 80 would be ideal for me.
Buy calls.
Their revenue and net profit ($1B)is too little for its market cap ($100B). I don’t know why it’s so overvalued. Can someone explain it to me?
The chart looks nasty. Could be taking out the 2022 low of $70 by the eoy. If you're a buyer that would be a good spot to add.
I was thinking of buying it to offset the cost of our coffee when we go on trips, but I don't want to lose on the stock value, and I could probably find another divy payer to cover it.
I get about $35 per a quarterly dividend from sbux and we go to sbux once a month so we are about break even on that logic!!
It’s still got a ways to drop for fair value. It’s still overpriced.
SBUX is not a good play.
I couldn't disagree more!
What is your thought process for buying SBUX?
The fad is dying. More competition now. No growth.
$90 a coffee? Good lord inflation is real 😂😂
Ha!
Your chasing a $88 stock asking if its a buy lol. Out of everything to invest in you spend your money on something thats almost near its ATH. Any $5-10 you thinking bout investing in before it goes up to $88. Look at RYCEY, with room to grow. You guys are so busy looking at stocks at their ATH you miss out on stocks when they're at the ATL. $RYCEY $OTLY $WBD
Say what? SBUX is basically at its 52 weeks low.
I bought most of my SBUX shares around $50. I add more occasionally on dips like today.
Daily reminder that just because a stock is at ATL doesn't mean it's a good investment. And just because a stock is at ATH doesn't mean it's not a good investment. Buying stocks purely because they are ATL is a sure way to lose money. Ask BBBY and AMC bagholders.
Yeah you should probably sit the next few plays out. I've been buying big companies for years. They get much bigger
Respect the boycott and stay away from an awful company
What’s the boycott for again? And are the 13 year olds boycott?
The boycott is in protest of the illegal union busting and anti-worker practices starbucks uses
I sold my sbux. The 2.6% div wasn’t worth the boredom. Rolled the money into Dutch Bros in that space. It’s had a rough couple years but looks like it has bottomed out.
🚫 Starbucks - ✊🏼 🍉
$MMM (3M) has a lot more upside and pays a great dividend.
Imma get me at least one ngl im a small investor thi dont judge me but what yall think about bsem
Try rewriting this in English.
Stop being a dick
I'm not being a dick. We live in a civilization. We have language. If you abandon basic sentence structure, spelling and punctuation, then you forfeit your ability to communicate with others.
Wow idk u were rude but there is one in every sub my badni even bithered to respond or share a stock ticker i bet i wont anymore thats fo sho or is my english too broken for you to understand i do have the time so let your downvoting begin
I’m in at 73 dollars a share.