starbucks dividend payout ratio

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Starbucks Corporation (SBUX) Dividend Safety metrics. Several research firms recently commented on SBUX. High institutional ownership can be a signal of strong market trust in this company.29 Wall Street analysts have issued ratings and price targets for Starbucks in the last 12 months. For the fiscal year ending Sep 2020 , the consensus EPS* forecast has remained the same over the past week at 0.8 and remained the same over the past month at 0.8 . It’s an express store format that integrates mobile ordering and delivery seamlessly.The sales multiple is at 2.8, which is much lower than the stock’s five-year average P/S ratio of 4.0.Perhaps the biggest risk is the nature of the company itself. Starbucks has been increasing its dividend for 9 years. Their average twelve-month price target is $82.50, suggesting that the stock has a possible upside of 7.90%. The current pandemic is an acute reminder of this.Let’s now discuss that financial wherewithal.There are few brands stronger or more recognized globally than Starbucks. That’s because of COVID-19.Being a global company, they’re exposed to macroeconomic issues and broad economic slowdowns. And this has positioned them well in today’s environment.At the right valuation, it could be a phenomenal long-term investment.The DDM analysis is a tailored version of the discounted cash flow model analysis, as it simply substitutes dividends and dividend growth for cash flow and growth.The growth is spectacular, which supports my thesis regarding the quality of this business.That quality carries over to the dividend, too.I factored in a 10% discount rate and a long-term dividend growth rate of 8%.This DGR is at the top end of what I allow for when I use a DDM analysis.It typically commands a large premium for its quality, but that big premium has all but disappeared.However, Starbucks doesn’t need to grow at 14% in order to provide big dividend raises and an appealing rate of return.1 star would mean a stock is substantially overvalued; 5 stars would mean a stock is substantially undervalued. Telsey Advisory Group dropped their price target […] That’s before the COVID-19 pandemic became global. 3 stars is a hold.With a bit over $11 billion in long-term debt on a $73 billion market cap, Starbucks has no issues with debt.Overall, there’s so much to like about Starbucks as a long-term investment.And you can’t bring in ever-larger profits without providing the products and/or services the world demands and is willing to pay up for.This adds balance, depth, and perspective to our conclusion.Well, companies with the longest track records of dividend raises just so happen to be some of the highest-quality companies in the world.Fundamental analysis and valuation are as vital as ever.Moving over to the balance sheet, the company has a strong financial position.Indeed, this virus can stay alive longer than some businesses can stay solvent.They have immense scale, first. Their balance sheet is still very solid, but I’d like to see them refrain from reducing the strength of their financial position any further.And not every stock is a good buy, even after the drubbing the US stock market has taken.Another aspect of their quality (which has been temporarily rendered less effective) is their stores.

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