1. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Funds Holders: 70
Starbucks Corporation (NASDAQ:SBUX) , together with its subsidiaries, operates as a marketer and retailer of coffee all over the world. The stores offer coffee, tea, ready-to-drink beverages, and various food products including pastries and breakfast sandwiches.
Starbucks Corporation (NASDAQ:SBUX) reported revenue of $9.1 billion for the third quarter of 2024. It was 1% higher on a year-over-year basis and 6% higher than the revenue of the second quarter. However, global store sales declined by 3% year-over-year. This decline was mainly driven by negative 2% growth in North America and negative 14% growth in China.
Despite facing challenges, it reported progress in operational performance with a 28% increase in two top-tier store performances since the second quarter. Starbucks Corporation (NASDAQ:SBUX) has rolled out the Siren craft systems across 10,000 stores in the U.S. to reduce waiting time by up to 20 seconds. This will boost the comparable sales of the company by 1% to 1.5%.
The cold segment increased by 1% on a year-over-year basis with Cold espresso innovation driving the growth with a surge of 4% year-over-year. Digital Innovations, such as enhanced Mobile Order & Pay, contributed to an increase of 10% in revenue from the platform. Moreover, it also reported a surge in rewards members to 33.8 million reflecting higher customer engagement and lifetime value. Along with the existing customer base, Starbucks Corporation (NASDAQ:SBUX) has also announced plans for 500 new stores and 800 renovations in North America for Fiscal year 2024.
However, the company is in a legal dilemma as it is being sued for securities law violations. Whether it is able to survive this challenging situation is something investors should keep an eye on.
Regardless, the company has a dividend yield of 2.47%; the latest quarterly dividend payment was $0.57 per share. As reported in our previous article on the 10 best beverage dividend stocks to buy, the company has been growing its dividends for the past 13 years consistently. Along with that, analysts predict an upside of 8.32% in the share price. Moreover, 70 hedge funds have invested $2.92 billion in the company as of Q2 2024, as per Insider Monkey’s database. Thus, SBUX is placed on our list of best beverage dividend stocks to buy.
SBUX is one of the best beverage dividend stocks to buy based on hedge fund sentiment. But our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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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