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Investing

Time For Starbucks To Raise Its Dividend

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By Douglas A. McIntyre Published
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Of course, Starbucks (SBUX) does not have a dividend. But, they might want to revisit that.

Starbucks’s is no longer a growth stock, at least not in the classic sense. Its shares are down about 22% this year. McDonald’s (MCD), a rival in the coffee game, among other things, is up over 15%.

McDonald’s raised its dividend 50% yesterday, and its share are up almost 5% to a 52-week high of $53.73. According to MarketWatch, the MCD CEO said "Our business momentum, strong stable cash flow, borrowing capacity and anticipated future capital needs reinforce our view that cash available for dividends and share repurchase will continue to grow."

Starbucks is doing well financially, too. In the last quarter its operating income was $245 million. The company has about $325 million in cash and short term investments. Fully diluted shares number 764 million. A $.20 a year dividend might work.

If Starbucks does not want to dividend in cash, it could send out one of those little cans of mocha for each share. But, at $2 per, that is too much.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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