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Starbucks Corp. raised its dividend by 7.5%, keeping the implied yield for the coffee giant’s stock well above its peer group and the broader stock market.
The company
SBUX,
said late Wednesday that its quarterly dividend will increase to 57 cents a share from 53 cents a share. Shareholders of record on Nov. 10 will be paid the new dividend on Nov. 24.
Based on Wednesday’s stock closing price of $95.16, the new annual dividend rate of $2.28 a share implies a dividend yield of 2.40%.
That compares with the yield for the Consumer Discretionary Select Sector SPDR ETF
XLY
of 0.86% and the implied yield for the S&P 500 index
SPX
of 1.57%.
Starbucks’ stock slipped 0.2% in premarket trading, while the consumer discretionary ETF fell 0.7% and futures
ES00,
for the S&P 500 declined 0.7%.
Starbucks started paying a dividend in 2010. The company has increased its dividend every year for the past 13 years, at a compound annual growth rate (CAGR) of about 20%.
Meanwhile, Starbucks’ shares have been under pressure since the company reported fiscal third-quarter results on Aug. 2, in which profit topped expectations but revenue and same-store sales came up shy.
Although those results showed a big rebound in its business in China, some on Wall Street are worried that the rebound won’t last.
The stock has dropped 6.8% since Aug. 2 through Wednesday, while the consumer discretionary ETF has eased 1.5% and the S&P 500 has slipped 2.5%.
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