Starbucks' Dividend Growth Likely to Halt
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy SBUX?
Source: Fool
- Dividend Growth Review: Since issuing its first dividend of $0.05 per share in 2010, Starbucks has seen a staggering 1,140% growth in dividends, but this growth is expected to halt in 2023, impacting investor income expectations.
- Payout Ratio Warning: Starbucks' payout ratio has soared above 200%, indicating that the company is spending more than twice its net income on dividends, which raises concerns about its financial stability.
- Cash Flow Decline: The company's cash flow from operations has plummeted from $5.6 billion last year to $4.3 billion, highlighting increased pressure on sustaining dividends, compounded by the lack of share repurchases that dilute shareholder value.
- Investor Risk Advisory: Given the slowdown in dividend growth and deteriorating financial metrics, Starbucks' stock may face short-term pressure, suggesting that income-focused investors should consider avoiding this stock.
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Analyst Views on SBUX
Wall Street analysts forecast SBUX stock price to fall
21 Analyst Rating
12 Buy
7 Hold
2 Sell
Moderate Buy
Current: 96.760
Low
59.00
Averages
96.12
High
115.00
Current: 96.760
Low
59.00
Averages
96.12
High
115.00
About SBUX
Starbucks Corporations is a roaster, marketer, and retailer of specialty coffee globally. Its North America segment includes the United States and Canada. Its International segment includes China, Japan, Asia Pacific, Europe, Middle East and Africa, Latin America, and the Caribbean. Its North America and International segments include both Company-operated and licensed stores. The Channel Development segment includes roasted whole bean and ground coffees, Starbucks-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino and Starbucks Doubleshot, foodservice products, and other branded products sold outside the Company-operated and licensed stores. A large portion of its Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestle, while its global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba, Nestle, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong International Performance: Starbucks' international operations saw a net revenue increase of 10.3% and operating income growth of 19.2%, showcasing its competitiveness and growth potential in global markets, despite a decline in overall profitability.
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