In partnership with

Happy Monday!

My name is Zach, this is Dividend Data, and we have a great week of investing ahead of us!

I’ll start with a stock analysis of Starbucks, ticker symbol SBUX. The coffee company is one of the most recognizable brands, becoming a favorite stock among dividend growth investors. Today, I’m diving into its poor price performance over recent years. I explain the bull and bear case from the perspective of the long-term investor. On top of this, I share breaking news with some of the best dividend increases.

Let’s do this!

Was this email forwarded to you?

THE KEY STORY

Why You Should Buy Starbucks Stock in 2024 | SBUX Stock Review

The Fall of Starbucks

Starbucks has been a household name, renowned for its brand, coffee, stores, and innovative approach to customer loyalty. The Starbucks app lead the category and trend of fast-food rewards apps, online ordering, customer wallets, digital gift card cash, etc. However, the pandemic hit the company hard, causing a notable dip in earnings and even a quarterly loss. Despite being a leader in digital ordering and rewards, the pandemic exposed a critical flaw: a decline in the in-store culture that Starbucks was once known for.

Leadership Challenges

Howard Schultz, the legendary CEO, returned in March 2022 to steer the company back on course, only to leave a year later. His brief return was marked by efforts to revive the company's focus on hospitality and corporate culture. Yet, recent financial results have led to a plunge in stock prices, raising concerns about the new leadership's ability to handle the company's challenges.

Investment Opportunity - Buy in 2024?

For investors like myself, the current dip in Starbucks' stock price represents a significant buying opportunity.

Historically, Starbucks has been a dividend growth machine. The current dividend yield stands at 3%, which is an attractive for dividend investors. The company's stock, trading at $74.99, is down from its 2021 high of $126, reflecting recent earnings challenges but also presenting a potential bargain.

Financial Health and Projections

Despite recent setbacks, Starbucks has shown resilience. Over the past decade, it has maintained a strong growth trajectory, though recent years have seen a slowdown. Analysts project that earnings per share will grow significantly in the coming years, with an expected 17.29% increase in 2025. This optimism is shared widely, with 63.3% of analysts rating the stock as a buy.

However, it's not all smooth sailing. Starbucks has increased its debt significantly, raising concerns about its balance sheet. The company's aggressive expansion and share repurchases have contributed to this debt load. While they have strong cash flow and significant cash on hand, the increasing debt warrants caution.

Future Growth Prospects

Starbucks continues to invest heavily in new store openings, especially internationally, where the potential for growth remains high. The company's successful partnership with PepsiCo for ready-to-drink beverages and its strong brand presence ensure it remains a formidable player in the market. The brand will likely remain valuable for a long time to come.

Conclusion

In conclusion, Starbucks represents a compelling investment for long-term dividend growth investors. The current low valuation, coupled with strong future growth projections, makes it an attractive buy. While there are risks associated with its debt levels, the overall outlook remains positive.

Take a demo, get a Blackstone Griddle

• Automate expense reports so you can focus on strategy

• Uncapped virtual corporate cards

• Access scalable credit lines from $500 to $15M

Request a demo

THE NEWS

Joe Biden Drops Out Of The US 2024 Presidential Election, Endorses VP Harris

1. OFFICIAL: Joe Biden Steps Out Of The Election, Endorses Kamala Harris. (X/Twitter: @JoeBiden)

2. Update on the FBI Investigation of the Attempted Assassination of Former President Donald Trump (FBI)

NOTABLE DIVIDEND INCREASES

Duke Energy, Union Pacific, Citigroup, PPG, GCBC, etc

• $DUK - Duke Energy declares a $1.045/share quarterly dividend, 2% increase from the prior dividend of $1.025.

• $GCBC - Greene County Bancorp declares $0.09/share quarterly dividend, 12.5% increase from prior dividend of $0.08.

• $UNP - Union Pacific Corporation declares $1.34/share quarterly dividend, 3.1% increase from prior dividend of $1.30.

• $PPG - PPG declares $0.68/share quarterly dividend, 4.6% increase from prior dividend of $0.65.

• $C - Citigroup declared $0.56/share quarterly dividend, 5.7% increase from prior dividend of $0.53.

Source: Dividend Data

Thanks for the read! Let me know what you thought by replying back to this email.

— Zach

Disclaimer: Dividend Dividend Weekly (Dividend Data) is not a professional financial service. All materials released from Dividend Data Weekly (Dividend Data) are for educational and entertainment purposes. Dividend Data Weekly (Dividend Data) is not a replacement for a professional's opinion. Contributors to the Dividend Data Weekly (Dividend Data) might have equities mentioned in the newsletter