Love Starbucks Coffee? Here’s Why You Might Want to Own the Stock Too
If you’re the type who starts the day with a Starbucks coffee in hand, you’re already a loyal customer. But what if your love for the brand could also benefit your portfolio?
Over the past five years, Starbucks (NASDAQ: SBUX) has offered investors a mix of modest stock growth and strong dividend income. While the stock’s performance has had its ups and downs, the company’s commitment to rewarding shareholders through dividends makes it an intriguing choice for income-focused investors.
Starbucks Stock Performance: A Mixed Brew
Between April 2020 and April 2025, Starbucks stock grew by approximately 7.83% to 19.4%, depending on the data source. While this represents positive movement, it has lagged behind broader market indices at times.
More recently, the stock has faced headwinds:
• 1-Year Performance: Down between -5.46% and -7.42%
• 1-Month Performance: A sharper drop of about -17.58% to -17.74%
This recent downturn may cause hesitation for newer investors, but there’s more to the story—especially when you look at dividends.
Brewing Consistent Dividends
Starbucks has increased its dividend every year for the past 14 years, demonstrating a strong commitment to income investors:
• 2020 Quarterly Dividend: $0.41/share
• 2025 Quarterly Dividend: $0.61/share
This consistent growth has produced an attractive forward yield of around 2.99%, which is well above its 5-year average of 2.08%. And with a payout ratio around 74-75%, the dividend appears sustainable for the foreseeable future.
Why It Matters: The Interplay of Price and Payout
Despite the recent dip in stock price, Starbucks continues to deliver reliable income to shareholders. Here’s why that matters:
• Income Cushion: Investors focused on income benefit from the steady dividend, even when the stock price dips.
• Total Return Potential: While price appreciation has been modest, the growing dividend adds to the total return over time.
• Long-Term Value: Holding Starbucks for the past five years would have delivered both capital gains (though limited) and rising dividend income—a comforting combination for patient investors.
Bottom Line: Sip the Coffee, Own the Stock?
Starbucks may not be a growth rocket in the current environment, but it remains a dividend powerhouse. For those who appreciate strong brands, steady income, and are willing to wait out short-term volatility, SBUX may be worth a closer look.
So, next time you’re in line for your morning latte, ask yourself—should I own a piece of the brand that fuels my mornings?