Dunkin’ Brands has only been public for a short period but gave investors returns of more than 35% for 2012. It has already increased its dividend from $0.15 per quarter to $0.19. Investors can expect this trend to continue as Dunkin’ Brands increases its footprint in the U.S. and sees increased sales growth.
With Dunkin’ Brands’ new focus on driving franchise profitability, it announced 78 net new stores in the U.S. in the first quarter. This was the best the company has ever seen for this time period. With franchise sales and new store openings on the rise, Dunkin’ Brands will continue to provide strong returns for shareholders.
It is nearly impossible to hold a discussion on coffee without mentioning this $49 billion market cap company. Starbucks Corporation (NASDAQ:SBUX) is a roaster and retailer of coffee with operations in over 60 countries. The company roasts and sells specialty coffee drinks as well as pastries and baked goods at retail locations.
Last year marked Starbucks’ best year in its history with $13.3 billion in revenue. It ended the year with 12,903 stores including both company-operated and licensed stores. A total of 398 net new stores were opened in 2012. This represents a strong commitment for organic growth.
Starbucks Corporation (NASDAQ:SBUX) reported that 75% of its revenue came from beverage sales and only 4% came from packaged coffee sales. That represents an area of opportunity for growth in the future.
Setting the stage for international brand loyalty
One of the reasons Starbucks had favorable results in 2012 was from a 7% increase in global sales. Starbucks Corporation (NASDAQ:SBUX)’s focus on developing a presence globally will enable it to begin developing brand awareness and loyalty as it has in the U.S. Starbucks currently has a total of around 12,903 stores with 2,628 located in the China/Asia Pacific region.
One of the highlights for 2012 was 130 new stores opened in China. This strategy will enable investors to see around the same returns the stock has already given over the past 10 years at 18.7% with its new presence and focus in high- population areas throughout Asia. The current yield on its dividend is 1.2% on $0.21 per quarter; this is up from $0.10 in 2010. Investors can also anticipate dividend increases in the future, which will help with shareholder returns.
Best globally positioned company
An investment in either three of these stocks will give investors a cut in increasing global coffee consumption. Starbucks and Dunkin’ Brands offer income and dividend investors more than a 1% head start each year with signs of more increases to come. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has been the most volatile over the past few years.
If I had to pick just one I would throw my money at Starbucks Corporation (NASDAQ:SBUX) because of its ability to build brand loyalty and its current strategy in Asia with a high concentration of new store openings. As Starbucks builds its brand in Asia, the stock will benefit greatly from this new revenue stream.
The article You Drink It Every Morning; Why Not Invest in It? originally appeared on Fool.com and is written by John Kolb.
John Kolb has no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters and Starbucks. The Motley Fool owns shares of Starbucks. John 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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