Today, I bought 19 shares of SBUX at $57.17 per share.
Their PE ratio is higher than my preference at about 33. Their entry yield is only 1.4%, and their dividend growth history doesn’t even reach back 10 years.
So you’re probably asking “Why did you buy it then? SBUX doesn’t meet your criteria.” The answer: I’m an opportunist. There’s nothing better than when investors freak out about good news because it wasn’t as good as they’d hoped. Starbucks’ payout ratio is about 49%, and their dividend growth rate is very impressive, it grew 25% last year. This is far more of a growth investment than an income investment.
Starbucks is a staple in our culture, many people can’t start their day without Starbucks coffee (my wife included). The company is not afraid to try new things, such as instant coffee, home coffee makers, and even potentially wine and spirit bars. Starbucks has a great history and a great future, so being able to grab some shares on a dip is a nice opportunity.