Recent Purchase – Starbucks (SBUX)

Who doesn’t love coffee? I definitely do and I had SBUX on my radar since I started investing a few years ago. The wait is over, as I chose it as my next investment target from my recent watchlist. I think that people will not stop drinking less coffee in the future, as the world is going so fast nowadays. With more than 28,000 stores all over the world, Starbucks is positioned well to keep us going. We don’t have Starbucks in Lithuania yet, but I never miss a chance to visit Starbucks when traveling – it has something magical to it.

This is a brief description of the company from Yahoo Finance:

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, and food and snacks; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. It offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, premium Tazo, and Starbucks VIA brand names. As of April 26, 2018, the company operated 28,209 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Here are some key indicators of the stock:

  • Current Price: $52.07
  • P/E Ratio: 16.32
  • Annualized Dividend: $1.44
  • Current Yield: 2.30%
  • Payout Ratio: 48.2%
  • Raising dividends since: 2010 (8 years)

SBUX will be probably the lowest yielding company in my portfolio but that’s quite common for companies in services sector. It only pays out ~48% of profit, so it has some room to grow and I consider their dividend safe.

Purchase Summary

I purchased 24 shares of SBUX @$51.90 for a total of $1255.55 (including commissions). This will increase my net annual dividend income by $24.19 (24 * $1.44/share – 30% tax). I managed to purchase it before their ex-dividend date so I will receive their first dividend this month already!

What do you think about this purchase? Do you have Starbucks in your portfolio? Do you like Starbucks in general? Did you see better opportunities at the moment? I would be glad to read your comments!


Photo by Hans Vivek on Unsplash

2 thoughts on “Recent Purchase – Starbucks (SBUX)

  1. Great add to your portfolio. It’s a quality company with some issues. I’m convinced they can handle these issues. With another two annual increases of 20% growth in dividends and you’ll get a dividend in the 3-4% range. Gotta love it! Congratulations with a nice pick! 👍

    1. Hi DC,
      Thanks for the comment! I think it is a risk but I am betting that SBUX will solve their current problems and find some ways to go through their current troubles. I am not sure if they will be able to continue with raising their dividends so quickly going further but I definitely hope that they will do so 🙂

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