Do You Know This Coffee Stock?

Caribou Coffee (Nasdaq: CBOU) gets no respect. It's the Rodney Dangerfield of coffee stocks, and I think it's completely unfair.

Every barista's eye turned to Green Mountain Coffee Roasters (Nasdaq: GMCR) and its high-profile buyout of Diedrich Coffee over the past year. There's lots of drama inherent in buyout battles, and Peet's Coffee & Tea (Nasdaq: PEET) put up a good fight. But over the past year all three have delivered similar returns. Zoom out to a two-year checkup and Caribou is the biggest winner with a stunning 483% return. That's nearly a six-bagger in 24 months. Not too shabby!

Furthermore, the coffee shop chain just reported second-quarter results that tell me good things about Caribou's future. Compare and contrast with the competition:

Source: Capital IQ, a division of Standard & Poor's.

I'd say that Caribou is holding its own with this lot. Caribou has shifted its attention from building company-owned coffee shops into a less capital-intensive franchise strategy. Same-store sales increased by a respectable 4.8%. Vast expanses of untouched land lay ahead of this chain -- most of the coffee shops sit around the Minnesota home base, and there isn't a single store -- franchised or otherwise -- in major markets like California, Texas, or Florida.

At the same time, the company is also expanding efforts to sell packaged goods like bags of roasted beans and Keurig K-Cup packages. Yep, the same K-Cups that launched Diedrich into celebrity orbit present a major growth opportunity for Caribou as well.

So, is Caribou the next Starbucks? It depends. I certainly wish I had bought some shares two years ago, but the franchise buildout isn't proceeding as fast as I would like. I mean, it's a seven-hour drive from my house to the nearest Caribou location, and no cup of black nectar is quite worth that kind of a road trip. There's lots of untapped opportunity here, folks.

Yet, there's something to be said for a slow-but-steady approach in uncertain economic times, which is why I love Buffalo Wild Wings (Nasdaq: BWLD), for example. Caribou is much smaller than B-Dub and not as well-equipped to handle a sudden downturn in its fortunes. Some restraint seems prudent.

Is there room for another coffee chain in a world dominated by Starbucks and McDonald's (NYSE: MCD)? I think so, and I am putting my All-Star CAPS rating where my mouth is. That one-star rating looks ridiculous, and you can help me bring justice to the world of coffee in just a couple of clicks.