Can Starbucks Afford Its Prized Dividend While Fixing the Business?

Quick Read

• SBUX delivered an 8.79% gross leap and 23% EPS bushed successful Q2 2026, with Niccol raising full-year comparable-store income guidance to 5%-plus.

• Free currency travel covered SBUX's $0.62 quarterly dividend lone 0.88x successful FY2025, down from 1.28x, threatening its 64-quarter streak's 17% maturation cadence.

• Act now: the expert who called NVIDIA successful 2010 conscionable named his apical 10 AI stocks — and Starbucks didn't marque the cut. Grab the names FREE today.

Starbucks (NASDAQ:SBUX) is yet showing signs that CEO Brian Niccol's "Back to Starbucks" program is landing with customers. The question for income investors is whether the java giant's agelong dividend-growth streak tin past the outgo of the fix.

The Turnaround Finds a Pulse

Fiscal Q2 2026 was the cleanest information constituent yet. Revenue climbed to $9.531 billion, up 8.79% twelvemonth implicit year, with planetary comparable-store income up 6.2% connected 3.8% transaction growth. North America comps roseate 7.1%, portion China was fundamentally level astatine +0.5% comparable-store income growth, with a 1.6% diminution successful mean summons size. Non-GAAP EPS came successful astatine $0.50 versus the $0.4054 statement estimate, a 23.3% beat.

Niccol was nonstop connected the call: "Our 2nd 4th marked the crook successful our turnaround arsenic our Back to Starbucks program drove some apical and bottommost enactment growth."

Management raised its full-year outlook, guiding for comparable-store income maturation of 5.0% oregon much and non-GAAP EPS of $2.25 to $2.45. Meanwhile, Starbucks closed a China associated task with Boyu Capital, retaining a 40% involvement positive marque licensing, and slowed nett caller openings to conscionable 11 stores successful Q2, with 62 closures nether its restructuring plan.

Watch for Starbucks Q3 fiscal twelvemonth 2026 study connected Wednesday, July 29, 2026, aft the banal marketplace closes.

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The Dividend: A Streak Under Pressure

Starbucks pays a quarterly dividend of $0.62, with the adjacent ex-date connected August 14, 2026, and outgo connected August 28, 2026. The output is adjacent 2.4%, connected shares astatine $103.65. That is 64 consecutive quarters of payouts with a humanities CAGR of astir 17%.

Coverage is the concern. Free currency travel covered the dividend astatine 0.88x successful FY2025, down from 1.28x successful FY2024. Quarterly EPS has been beneath the payout successful each caller quarter, and shareholders' equity stands astatine antagonistic $8.458 billion. On a valuation basis, the trailing P/E is simply a affluent 79x, with a guardant P/E of 35x.

One affirmative signal: absorption suspended buybacks successful FY2025 (repurchases of $0) aft $1.27 cardinal successful FY2024, efficaciously prioritizing the dividend.