Coffee chain Starbucks (SBUX -0.73%) has one of the most remarkable investment stories of any consumer-products company; the stock has returned a life-changing 36,000% over its lifetime, turning a $1,000 investment into $369,000 had you reinvested dividends along the way.

But there's a new kid on the block. Dutch Bros (BROS -0.81%) went public in late 2021 and is rapidly growing as customers flock to its convenient drive-through locations. 

However, Dutch Bros is trading below its IPO price today. Should investors opt for what's proved to be lucrative in Starbucks stock? Or could Dutch Bros generate superior investment returns down the road? Let's take a look.

Dutch Bros has a more exciting growth outlook

Starbucks has been on a rampage of expansion since the early 1990s. The company has 36,170 stores worldwide, making it one of the world's largest chain retailers. Meanwhile, Dutch Bros is a small fraction of that number, with just 671 stores.

It's clear that Dutch Bros has a lot of room for expansion. Management has a long-term target of surpassing 4,000 stores in the United States. The company opened about 100 new stores in 2022, so there are years of steady store growth ahead to reach that goal.

BROS EPS LT Growth Estimates Chart

BROS EPS LT Growth Estimates data by YCharts

Starbucks is more mature but certainly not a slouch in the growth department. The company has demonstrated brand power and intends to have 55,000 stores by 2030. Analysts are optimistic about both companies; Starbucks has growth left in the tank, but Dutch Bros is the apparent growth winner because it's growing from a much smaller base.

But Starbucks has superior financials

But growth isn't the only factor investors should consider. Starbucks' size and established business model make it excellent for generating cash profits, which management can share with shareholders through dividends and share repurchases. Starbucks has raised its dividend for 13 consecutive years and reduced its outstanding shares by 23% over the past decade.

Dutch Bros is investing in opening stores and loses cash as a result. There are many stores to pay for over the coming years, which means investors should prepare for the sale of new shares to raise money. Adding new shares will dilute shareholders, making existing shares less valuable and potentially hurting investment returns by weakening per-share earnings growth.

BROS Free Cash Flow Chart

BROS Free Cash Flow data by YCharts

In addition, measuring the ratio of debt to EBITDA, Dutch Bros has more leverage on its books, further increasing the likelihood of equity raises. Shareholders will probably wait a while to taste a profit, which is something you can get from Starbucks right now. Only time will tell how much dilution happens and what impact it will have on investment returns -- but it's something to watch nonetheless. 

Which stock is the better buy?

The valuations between each stock are very interesting; you can look at the ratio of enterprise value to EBITDA, which essentially compares a company's market value plus net debt to its basic earnings. Dutch Bros is much more expensive, but it should be: It'll probably grow much faster.

The gap between the two seems logical. Dutch Bros should grow more than twice as quickly, but things like eventual dilution will also eat away at that gap. Dutch Bros was egregiously expensive in late 2022, but the price tag is far more reasonable today.

BROS EV to EBITDA Chart

BROS EV to EBITDA data by YCharts

So what's the verdict? Buy Starbucks if you're a more conservative investor. Such a large company should be less volatile yet still offer potential double-digit earnings growth. Buy Dutch Bros if you're hunting for big-game-type returns; the ride will probably be much bumpier, but the stock could outperform Starbucks over the next five years or longer with its growth.