1. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Topping our list of the Best Beverage Stocks to Invest in is Starbucks Corporation (NASDAQ:SBUX), the premier roaster and retailer of specialty coffee in the world with more than 32,000 stores in 80 countries.
The stock price of Starbucks Corporation (NASDAQ:SBUX) recently surged to a 52-week high of over $113 per share as the company’s better-than-expected results in Q1 2025 point to a turnout taking root. The Seattle-based company reported a 4% decline in its overall same-store sales in the quarter, better than the previously estimated 5%, while its overall revenue came in at $9.4 billion, which was basically unchanged from a year ago. Starbucks also continues to expand its international footprint and opened 377 net new stores globally in Q1. The company has raised its dividend at a CAGR of around 20% for 14 consecutive years and declared a quarterly dividend of $0.61 per share last month.
Under the leadership of Brian Niccol, Starbucks Corporation (NASDAQ:SBUX) is looking to rejuvenate its brand with the ‘Back to Starbucks’ initiative, which aims to streamline operations and enhance in-store experiences. The strategy includes some bold steps including restructuring the company’s corporate support and non-store workforce and limiting certain in-store amenities to paying customers etc.
Invesco Growth and Income Fund stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q3 2024 investor letter:
“Starbucks Corporation (NASDAQ:SBUX): The coffee retailer has struggled with China’s economic softness, declining sales and weaker US store traffic that have hampered revenues and profit margins. However, we believe the company has several positive, long-term catalysts, including strong growth in store count, better labor relations, improving productivity from labor, technology and innovation, and easier future earnings comparisons. We believed a management change was imminent, and shortly after we purchased the stock, Starbucks named a new CEO, which was seemingly greeted enthusiastically by investors.”
Overall, Starbucks Corporation (NASDAQ:SBUX) ranks first on our list of the best dividend-paying beverage stocks to buy. While we acknowledge the potential for SBUX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SBUX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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