Starbucks Has Nowhere To Go But Grow
This week I'm seeking a prestigious and long-term dividend-paying stock from the consumer cyclical sector.
That cyclicals sector includes twenty-eight industries ranging from Advertising Agencies to Apparel, Autos, Broadcasting, Department Stores, Gambling, Leisure, Lodging, Packaging, Personal Services, Shoes, Restaurants, Rubber, Recreational Vehicles, Plastics, Textiles, and all such consumer aimed enterprises.
Today I'm reviewing a large-cap restaurant firm named Starbucks Corporation. Its trading ticker symbol is SBUX.
Starbucks Corp is the roaster, marketer and retailer of specialty coffee. Operating globally, it sells a variety of coffee and tea products. It sells goods and services under brands including Teavana, Tazo, and Seattle's Best Coffee.
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.
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 July 26, 2018, the company operated 28,720 stores.
Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.
I use three key data points to gauge the value of any dividend equity or fund like Starbucks Corporation (SBUX):
(1) Price
(2) Dividends
(3) Returns
Besides those three, four more keys will finally unlock an equity or fund in which to invest.
But those first three primary keys, best tell whether a company has made, is making, and will make money.
SBUX Price
Starbucks's price per share was $56.45 at yesterday's market close. A year ago its price was $55.15 for a gain of $1.30 per share.
Assuming Starbucks's price will trade in the range of $45 to $65 next year, Starbucks's current $56.45 price could double its gain to $59.05 by late-September, 2019.
SBUX Dividends
Starbucks's most recent quarterly dividend was $0.36 declared June 19th and paid August 24th. That dividend was increased from $0.30 last Month.
At this most recent $0.36 quarterly pay rate, Starbucks's annual dividend is calculated at $1.44 yielding 2.6% at yesterday's closing $56.45 price.
Gains For SBUX?
Adding the $1.44 estimated annual dividend to my double gaining $2.60 upside for Starbucks makes a $4.04gross annual per share gain, which is reduced by the costs to trade the shares.
A little under $1,000.00 invested today at the $56.45 recent price buys 18 Starbucks Corporation (SBUX) shares.
A $10 broker fee paid half at purchase and half at sale costs $0.56 per share, subtracting that $0.56 brokerage cost from the estimated $4.04 gross gain leaves a net gain of $3.48 X 18 shares = $62.64 or about a 6.25% net gain on a $1,016.10 investment.
Therefore, Starbucks Corporation whose trading ticker symbol is SBUX, now shows a possible 6.25% net gain including a 2.6% dividend yield.
Thirty brokers cover this stock:
Ten say "buy" SBUX.
Four say SBUX will "outperform" its peers.
Sixteen say SBUX is a stock to "hold".
None says SBUX will "underperform".
None say "sell' the stock.
Thus, the analyst consensus recommendation number is 2.2 or "outperform".
The median price target set by those thirty brokers is$0.84 under my double gaining estimate of $59.05 price target for SBUX.
So, you could look at all these speculative numbers this way, Starbucks Corporation, whose trading ticker symbol is SBUX, has made money, is making money, and could net a 6.25% net annual gain including a 2.6% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if Starbucks Corporation (SBUX) is worth your time and money.
Disclaimer:
This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...
more