Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty coffee giant Starbucks (Nasdaq: SBUX) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Starbucks' business and see what CAPS investors are saying about the stock right now.

Starbucks facts

Headquarters (Founded)

Seattle (1985)

Market Cap

$20.4 billion



Trailing-12-Month Revenue

$10.1 billion


Founder/CEO Howard Schultz
CFO Troy Alstead

Return on Capital (Average, Past 3 Years)


Compound Annual Revenue Growth (Over Past 3 Years)


Cash / Debt

$1.3 billion / $549 million

Price-to-Earnings (SBUX and S&P 500)

27.2 and 15.8

1-Year Return



McDonald's (NYSE: MCD)
Caribou Coffee (Nasdaq: CBOU)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 23% of the 7,316 members who have rated Starbucks believe the stock will underperform the S&P 500 going forward. These bears include globalvillager and CAPS All-Star Tastylunch, who is ranked in the top 3% of our community.

Two months ago, globalvillager helped Fools perk up to the plunge possibilities: "Lost its edge and its space. The price folks will pay for premium coffee (see Mickey Ds very good roast ... ) and [Starbucks'] associated margins are eroding."

To be sure, Starbucks still stands as the dominant player in the specialty coffee space. Caribou Coffee has less than 10% of the number of coffeehouses that Starbucks has, for instance. Of course, in a weak economy that doesn't look like it'll boom anytime soon, our community feels that quick-service and fast-casual chains -- the most formidable being McDonald's, of course -- simply offer a better value proposition. CAPS All-Star Tastylunch even questioned Starbucks' competitive edge against smaller chains like Caribou Coffee and the thousands of independent coffee shops all over the nation:

I still refuse to believe that Coffee is back. ~10% unemployment, higher credit card rates, homes underwater. What dope pays 4 dollars for coffee when you can have them for mere pennies if you self brew in that situation?

Starbucks is an odd chain. [I]t's the only one I know of that actually doens't hurt independents when it opens nearby and in fact it usually boosts their business from what I understand. ... [T]hat says to me in the long run [Starbucks] has zero moat. Not saying they won't survive, just saying I don't envision them thriving.

What do you think about Starbucks, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Starbucks is a Motley Fool Stock Advisor selection. The Fool's disclosure policy always gets a perfect score.