Starbucks has also announced a strategic partnership with the dairy giant, Danone, which would enable Starbucks to serve healthy specialty yogurts at its stores. This will not only help Danone in expanding its yogurt products in the U.S., but it will also allow Starbucks to grow its health and wellness offerings in the country. The new variety of yogurts would be launched under the Evolution Fresh brand.
In its latest-quarter, Starbucks Corporation (NASDAQ:SBUX)’ earnings jumped to a record $0.55 per share. Revenue increased by 13%, driven by high comparable sales growth of 8%. As Starbucks is consistently expanding itself, it remains on track to achieve growth of almost 10% during the next quarter. Starbucks is trading at a high forward price-earnings of 27.8 and yields a dividend of 1.1%, making it more expensive than Green Mountain. A mean recommendation of 1.7 on the sell side makes Starbucks the best buy in the coffee industry.
In an effort to grow itself in the lodging market, Dunkin Brands Group Inc (NASDAQ:DNKN) has announced that it would be opening two new stores at Great Wolf Lodge resorts in Virginia and Michigan. This latest move comes as part of Dunkin Brands’ strategy of targeting travelers, who want to enjoy a family-resort vacation.
In its latest quarter, Dunkin Brands Group Inc (NASDAQ:DNKN) was able to double its net profit to $0.38 per share. The chief reason behind this jump was high sales in the international regions, especially Southeast Asia. After Baskin-Robbins’ huge success in the Middle East, Dunkin’ Brands has decided to expand into Germany as well.
In order to compete with its biggest rival, Starbucks, Dunkin Brands Group Inc (NASDAQ:DNKN) has plans of expanding itself across the globe. However, Dunkin’ Brands still needs to do a lot of work before it can give Starbucks a tough time in the coffee market. Dunkin’ Brands is trading at a forward price-to-earnings of 24.8 and yields a dividend of 1.7%, making it slightly cheaper than Starbucks. A mean recommendation of 2.2 on the sell side depicts that it’s also one of the top buys in its industry.
Conclusion
As Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has successfully established itself among the big coffee and tea giants, Keurig’s prospects look really bright. Given the fact that the company is consistently expanding its reserve coffees, its K-Cup market share is bound to go nowhere but up. The bottom line is that Green Mountain Coffee Roasters is still one of the best buys in the coffee industry. In short, buy it for an upside of 20%.
The article A Hot Coffee Deal in Town originally appeared on Fool.com and is written by Waqar Saif.
Waqar Saif has no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters and Starbucks. The Motley Fool owns shares of Starbucks. Waqar is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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