5 Best November Dividend Stocks To Buy

3. Starbucks Corporation (NASDAQ:SBUX)

Number of Hedge Fund Shareholders: 55

November 25 Dividend Payout: $0.53

Thanks to a 14.4% CAGR over the past five years, Starbucks Corporation (NASDAQ:SBUX)’s dividend is becoming one to watch for investors, with a yield that now stands at 2.43%. Its dividend growth has slowed somewhat over the past few years as the company’s payout ratio pushes 62%, but Starbucks’ 11-year run of dividend growth shouldn’t be in jeopardy any time soon.

The company expects its Reinvention plan, which aims to invest $450 million in existing stores to improve their efficiency and better tailor them to their existing markets, to help grow non-GAAP EPS growth by as much as 20% in the coming years.

Hedge fund ownership of Starbucks Corporation (NASDAQ:SBUX) has trended down over the past two years after peaking during the first quarter of 2020, just as the pandemic was hitting. There’s been a 22% drop in the number of smart money managers long SBUX since then. Ray Dalio’s Bridgewater Associates has added to its SBUX position every quarter since Q3 2020 and owned 3.24 million shares as of June 30.

RiverPark Wedgewood Fund exited its Starbucks Corporation (NASDAQ:SBUX) position in Q2 and laid out some of the challenges the company has faced since the pandemic hit in its Q2 2022 investor letter:

“We exited our position in Starbucks during the second quarter. We do not mind admitting that there was a heated internal debate over this position, as there were several conflicting issues to weigh in our decision. Before the pandemic, we had been quite happy with the Company’s execution and the stock’s performance, and we were likewise happy with strategic decisions made during and immediately after the initial pandemic-related lockdowns in 2020, as we have written previously.

Despite our appreciation for the Company’s execution during this period, it was dealing with some concerning issues. First, as a business reliant upon stores being open, the Company faced continuing risks from rolling pandemic-related lockdowns, particularly in China, which is the Company’s second largest and fastest-growing market. A second and related issue was employee illness; even as stores were open, various pandemic waves (Omicron, for example) caused many employees to miss shifts, making it very difficult and expensive for Starbucks to keep its stores staffed properly…”