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
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 | $24.46 billion |
| Industry | Restaurants |
| Trailing-12-Month Revenue | $10.71 billion |
| Management |
Founder/CEO Howard Schultz CFO Troy Alstead |
| Return on Equity (Average, Past 3 Years) | 18.5% |
| Dividend Yield | 1.6% |
| Cash/Debt | $1.45 billion / $552 million |
| Competitors |
Green Mountain Coffee Roasters
McDonald's
Peet's Coffee & Tea |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 23% of the 7,288 members who have rated Starbucks believe the stock will underperform the S&P 500 going forward. These bears include Dijeridoo and joecourt.
Less than a month ago, Dijeridoo wrote that Starbucks "has really lost that 'trendy' vibe with which it roared onto the market." Our CAPS member concludes: "With so many locations, market saturation coupled with continuing price hikes for their beverages means that the high-water mark for the company may have already passed."
Overexpansion, coupled with intensifying competition in the specialty coffee space, continues to worry many Fools about Starbucks' prospects. In fact, Starbucks' compound annual profit growth over the past three years of 12% is substantially lower than rivals Green Mountain's 83.6%, McDonald's 27.7%, and Peet's 43.6%, as well as other restaurant stocks like Panera Bread
CAPS member joecourt elaborates on the bear case:
They have successfully saturated the market, I swear I cannot walk 4 blocks in Chicago without running into one. But there is the problem -- they have more than enough stores. Now the prices are going up. I think while they have upper and upper middle class business they don't really have anywhere else to go. I don't see it falling apart but I don't think they have much growth left, if any.
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