12 Most Reliable Dividend Stocks To Buy According to Hedge Funds

9. Starbucks Corporation (NASDAQ:SBUX)

Number of Hedge Fund Holders: 76

Starbucks Corporation (NASDAQ:SBUX) ranks ninth on our list of the best dividend stocks. The American multinational chain of coffeehouses specializes in a wide range of coffee beverages. While the economy, particularly consumer spending, has demonstrated resilience over the past year amid ongoing uncertainty, Starbucks hasn’t seen the same level of success. The retail coffee market’s intense competition and fragmentation present significant challenges for the company. In the US, the top five coffee chains together control less than half of the market, providing consumers with numerous alternatives to major chains. With no barriers to switching, customers can easily opt for other choices, leaving Starbucks with minimal room for mistakes—an issue that appears to be impacting its performance. In the past 12 months, the stock has shown a modest return of 0.29%.

Starbucks Corporation (NASDAQ:SBUX) delivered mixed results in fiscal Q4 2024. The company reported $9.07 billion in revenue, a 3.2% decline compared to the same quarter last year. Despite this, its cash position remained steady, with $6 billion in operating cash flow. During the quarter, the company expanded its footprint by adding 722 net new stores, bringing its total to 40,199 locations. Of these, 52% are company-operated, while 48% are run under licensing agreements.

Invesco Distributors, Inc. highlighted Starbucks Corporation (NASDAQ:SBUX) in its Q3 2024 investor letter. Here is what the firm has to say:

“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.”

On December 11, Starbucks Corporation (NASDAQ:SBUX) declared a quarterly dividend of $0.61 per share, which was in line with its previous dividend. The company’s dividend growth streak spans over 14 years. The stock supports a dividend yield of 2.64%, as of January 12.

As of the close of Q3 2024, 76 hedge funds tracked by Insider Monkey held stakes in Starbucks Corporation (NASDAQ:SBUX), up from 70 in the previous quarter. These stakes are collectively valued at over $3.2 billion.