) credit. It has a market capitalization of $51 billion and it
continues to grow earnings nicely.
Even better, the company is returning cash to shareholders
with a quarterly dividend of 21 cents a share, giving it an
annual yield of 1.2%.
When companies get really big, it's often hard to maintain
solid earnings and sales growth rates. But so far, Starbucks
remains on the growth path. Annual earnings are seen rising 22%
this year and 21% in 2014.
The stock was featured in this space in late June just after
the company announced further plans to expand aggressively in
At the time, it was trading just above a three-weeks-tight buy
point of 65.03. Starbucks continues to trade tightly ahead of its
earnings report Thursday after the close. The consensus estimate
calls for profit of 53 cents a share, up 23% from a year ago with
sales up 13% to $3.72 billion.
Once again, investors will be looking at sales trends closely.
When Starbucks reported fiscal second-quarter results in April,
global same-store sales rose 6%, flat from the prior quarter. In
the Americas, sales rose 7%, also flat. In the China/Asia Pacific
region, they rose 8%, a slight deceleration from 11% growth in
the first quarter.
Starbucks continues to eye the single-serve coffee market for
growth. Starbucks andGreen Mountain Coffee Roasters (
) have been partners since 2011. In May, the companies agreed to
extend the partnership for at least another five years. Starbucks
and Tazo-branded single-serve packs are made and sold for Keurig
brewing machines. Some thought the partnership might dissolve
after Starbucks introduced Verismo, its own single-cup brewer,