BROS - Starbucks Q1: A Dividend Grower Every Investor Should Own

2024-02-07 11:00:32 ET

Summary

• Starbucks Corporation reported Q1 earnings that missed estimates, but the company still is experiencing growth in the U.S. and internationally.
• The company's rewards member base continues to grow, reaching 34.3 million in Q1.
• Management aims for a 50% payout ratio and expects cash from operations to continue growing, supporting further dividend growth.
• Using the Discounted Cash Flow Model, I have a price target of $111 for the coffee giant.
• A report by the Congressional Budget Office predicts unemployment will rise to 4.4% and GDP growth will slow, causing consumer spending to weaken.

Introduction

Every time I mention Starbucks Corporation ( SBUX ) I kick myself for not investing in the coffee giant years ago. I remember vividly saying, "no one cares about coffee." Fast-forward 16 years later, and you can't go anywhere without seeing a Starbucks. The company is one of the most globally-recognized brands in the world and a company I think every investor should own in their portfolio....

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