Understanding Starbucks Corp's Upcoming Dividend Payout and Historical Performance
Starbucks Corp (SBUX, Financial) recently announced a dividend of $0.57 per share, payable on 2024-02-23, with the ex-dividend date set for 2024-02-08. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Starbucks Corp's dividend performance and assess its sustainability.
What Does Starbucks Corp Do?
Starbucks is one of the most widely recognized restaurant brands in the world, operating more than 38,000 stores across more than 80 countries as of the end of fiscal 2023. The firm operates in three segments: North America, international markets, and channel development (grocery and ready-to-drink beverage). The coffee chain generates revenue from company-operated stores, royalties, sales of equipment and products to license partners, ready-to-drink beverages, packaged coffee sales, and single-serve products.
A Glimpse at Starbucks Corp's Dividend History
Starbucks Corp has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis. Starbucks Corp has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Starbucks Corp's Dividend Yield and Growth
As of today, Starbucks Corp currently has a 12-month trailing dividend yield of 2.28% and a 12-month forward dividend yield of 2.41%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Starbucks Corp's annual dividend growth rate was 8.90%. Extended to a five-year horizon, this rate increased to 10.90% per year. And over the past decade, Starbucks Corp's annual dividends per share growth rate stands at an impressive 18.10%.
Based on Starbucks Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Starbucks Corp stock as of today is approximately 3.82%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Starbucks Corp's dividend payout ratio is 0.58.
Starbucks Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Starbucks Corp's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Starbucks Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Starbucks Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Starbucks Corp's revenue has increased by approximately 16.20% per year on average, a rate that outperforms approximately 87.38% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Starbucks Corp's earnings increased by approximately 53.60% per year on average, a rate that outperforms approximately 90.39% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.70%, which outperforms approximately 69.44% of global competitors.
Next Steps
In conclusion, Starbucks Corp's dividend payments, consistent growth in dividend per share, and a prudent payout ratio, coupled with robust profitability and growth metrics, paint a promising picture for value investors. The company's ability to sustain and potentially increase its dividends makes it an attractive option for those seeking steady income streams. As Starbucks Corp continues to expand its global footprint and adapt to market changes, its dividend policy remains a key factor for investors to consider. Will Starbucks Corp's strategic initiatives allow it to maintain its dividend achiever status in the years to come? This is a question that value investors may ponder as they evaluate the company's long-term potential.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
