One Raise At A Time | Starbucks FTW!

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Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Starbucks for another dividend increase!
Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?  Dividend growth investing is far from a get rich quick investment strategy, rather you need to remain focused on the long term goal to be successful.

This afternoon the Board of Directors at Starbucks Corporation (SBUX) raised up their dividend payment to shareholders.  The dividend was increased from $0.30 up to $0.36.  That's a huge 20% increase!  Starbucks has now grown their payout to shareholders for 8 consecutive years which gives them the title of Dividend Challenger.  Shares currently yield 2.51% based on the new annualized payout.

The increased dividend will be paid out on August 24, 2018 to shareholders of record as of August 9th.  The press release can be found here.  

Also in the press release was that management expects to return $25 B in cash to shareholders via buybacks and dividend through FY 2020.  Some more number crunching will be needed to get some estimates, but for a reference point Starbucks has been averaged $3.01 B per year over the last 3 fiscal years and FY 2017 ended with $3.49 B total.

Since I own 56.208 shares of Starbucks Corporation in my FI Portfolio this raise increased my forward 12-month dividends by $13.49.  This is the 5th dividend increase I've received from Starbucks since initiating a position in 2014.  Over that time Starbucks has grown the dividend payout by 177%.  According to US Inflation Calculatorthe total inflation over that same period has come in at just 6.3%

A full screen version of this chart can be found here.

Starbucks' dividend history might not be especially long, but they have been more than making up for that through growth.  Even more impressive is just how consistent the growth has been as you can see in the following chart.  

The 1-, 3- and 5-year rolling dividend growth rates since 2011 can be found in the following chart.  

A full screen version of this chart can be found here.

*2018's dividend assumes the new quarterly payout of $0.36 per share is maintained for the rest of the year.

Wrap Up

This raise increased my forward dividends by $13.49 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 2.98% this raise is like I invested an extra $450 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

Thus far in 2018 I've received 30 dividend increases from 29 of the companies in my FI Portfolio combining to increase my forward 12-month dividends by $281.34.  

My FI Portfolio's forward-12 month dividends increased to $6,298.21.  Including my FolioFirst portfolio's forward dividends of $82.58 brings my total taxable accounts dividends to $6,380.79.  My Roth IRA's forward 12-month dividends are at $343.29.

Do you own Starbucks Corporation?  Do think they can keep the high dividend growth going?

Please share your thoughts below.


  1. Thanks for reporting, I hadn't seen the raise yet. This is good news and a huge raise! I think SBUX has a lot of growth ahead especially in China.

    1. AAI,

      Yeah it was buried in their Q3 update release yesterday but it sure was nice. And that $25B target to return to shareholders through the end of FY 2020 is a pretty ambitious goal that should mean more hefty dividend increases are heading our way.

      All the best.

  2. The size of the increase caught me by surprise, especially given the other news in the release and how the market reacted to the store closures and results. However, the fact that the dividend was increased and the share buyback plan was increased gives me confidence in the long-term picture for the coffee giant.



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