Starbucks is the largest coffeehouse company in the world, with over 32,938 retail locations. Starbucks has been a good investment for decades, and it seems that the brand still has room to expand.
The single most difficult aspect of purchasing a stock is analyzing its strategic role and financials. Our guide will show you how to open a brokerage account and start investing in Starbucks stock.
Quick Starbucks History
Jerry Baldwin, Zev Siegl, and Gordon Bowker founded Starbucks in 1971. Starbucks was incorporated then under the laws of the State of Washington, in Olympia, Washington, on November 4, 1985. This company owns and runs more than 30,000 coffee shops that serve hot and cold beverages, whole-bean coffee, and a variety of treats.
Starbucks has been in competition not only with other coffee houses, but also with fast-food restaurants like Chick Fil-A. Starbucks went public on June 26, 1992, at a price of $17 per share and closed trading that first day at $21.50 per share. Thousands of dollars invested back then would now be worth millions.
The Good and the Bad of Starbucks Stock
There are many potential benefits to owning stocks or shares in a company. Here are some of the pros and cons of being a Starbucks shareholder.
Pros of Owning Starbucks Stock
- Its smartphone app encourages consumers to use mobile ordering and has helped grow the company’s sales immensely over the past year.
- The company’s national presence is remarkable, with over 31,000 locations worldwide.
Cons of Owning Starbucks Stock
- Starbucks Coffee has made major investments in countries such as China and India. However, there’s no guarantee that they will have continued international success as the company continues to expand.
- Every year Starbucks is forced to compete with low-cost chains like Chipotle, Five Guys, and many convenience store franchises in the area.
Outlook for Starbucks Stock
Starbucks is expected to rise at a rate of about 6% per year for the next five years. The company posted $6.6 billion in sales on April 27, up 11.2 percent from the first quarter of 2020’s $5.9 billion. Starbucks wants to extend into new countries in order to continue to develop the brand.
The company also opened 5 net new stores in the second quarter of fiscal 2021. Thus yielding 3% year-over-year unit growth, ending the period with 32,943 stores globally. Consolidated net profits of $6.7 billion grew 11% year over year. This is largely attributed to a 15% rise in comparable store sales.
Steps to Buy Starbucks Stock
To purchase Starbucks stock, you must first open a brokerage account. Then open a trading account, deposit money, and then begin purchasing shares.
Step 1: Select a Brokerage
You must first locate a brokerage in order to purchase Starbucks stock. You’ll need to locate a broker that can connect you to the NASDAQ, which is where the stock is sold.
Step 2: Open the Trading Account
After you’ve selected a brokerage you’ll need to open an account with them. This account is only available through the brokerage online, and it helps you to keep track of your Starbucks shares.
Step 3: Deposit Funds Into the Account
The amount of money you can spend has little to do with Starbucks and more to do with your financial status. Stocks can be unpredictable, so give yourself time to see how well specific stocks are performing. After you’ve linked a bank credit/debit card to your account, you’ll be able to deposit funds to purchase Starbucks stock.
Step 4: Search for the Starbucks Ticker Symbol
A ticker symbol is an abbreviation that is used to distinguish publicly trading shares in a company. Starbucks stock is traded on Nasdaq, under the trading symbol SBUX.
Step 5: “Purchase Starbucks Stock
You’d log into your online brokerage account, search for Starbucks stock. After that, you’d enter the number of shares you want to buy, and press “Buy.” After you’ve purchased Starbucks stock you would keep track of your shares and how they’re doing.
Is Starbucks Stock a Good Buy?
Starbucks is one of the most important growth stocks to watch in 2021. Starbucks stays ahead of the competition thanks to its well-known brand and strategic partnerships. They have locations in 62 different countries and many of them are flourishing in their local community. Since being heavily affected by the pandemic, Starbucks has shown a lot of resiliency.
Starbucks’ worldwide revenue growth has accelerated and the company is bracing for a spike in consumer demand as the pandemic threat reduces later in this year. Starbucks is definitely a stock worth watching this year if you plan to invest on the stock market. If you plan on investing in Starbucks but feel some hesitancy, contact a trusted financial advisor for insights if this is right for you.