Starbucks, the world’s largest coffee chain, had another stellar year in 2014. Revenue has grown at around 11% on average, each year since 2009. Additionally, with one of the most successful apps on the market, the mobile service accounts for almost 20% of all Starbucks transactions. Yesterday, the coffee company announced a 2 for 1 stock split at the annual shareholder meeting, for the first time in almost 10 years. As of the end of this month, shareholders will receive one extra share for each share they own. The company has announced 6 stock splits in its history and the last announcement was in 2005. Given these fundamentals, the market places the coffee house’s stock at a strong buy.
Investor Notes:
- The stock split period will be up to 30th March, the new shares will be payable from 8th April and will be trading on a stock adjusted basis on 9th April 2015.
- In addition, the company plans to initiate a delivery service in certain parts of the U.S. over the next year.
- Earnings for this quarter are expected to rise by over 7% $0.65, up from $0.55 last year.
- Revenue is expected to move from $3.87 billion the same time last year, to $4.52 billion this quarter, representing a 17% rise in sales year-on-year.
- Banc De Binary Analysts believe that given the announcement of the stock split and the strong financials, Starbucks stock will be attractive to investors, indicating a potential long-term upward movement on Starbucks stock options.