Starbucks (SBUX) DIvidends Date & History

Key Takeaways

• Starbucks (SBUX) provides a forward dividend yield of 2.51%, with quarterly payments of $0.62 per share.
• The company boasts a 16-year consecutive streak of annual dividend increases.
• Payout ratio stands at over 204%, exceeding earnings coverage and signaling potential risks.
• Dividend yield is competitive with peers like McDonald's (MCD) at 2.48% and higher than Yum! Brands (YUM) at around 1.8%.
• Next ex-dividend date is May 15, 2026, with payment on May 29, 2026.
• Negative trailing twelve-month levered free cash flow of -$1.44 billion pressures sustainability.

Dividend Overview

Starbucks Corporation (SBUX) maintains a consistent quarterly dividend policy, currently paying $0.62 per share, which annualizes to $2.48. This delivers a forward yield of 2.51% based on a recent stock price around $98.67. The ex-dividend date for the next payment is May 15, 2026, with funds distributed on May 29, 2026. While not a high-yield stock, Starbucks profiles as a dividend growth contender, having raised payouts annually for 16 straight years. The five-year average yield of 2.26% underscores steady income appeal for growth-oriented investors in the consumer discretionary sector. However, recent earnings pressures have elevated the payout ratio, tempering its profile as a reliable income play.

Dividend History and Growth

Starbucks initiated its modern dividend era in 2010 at $0.05 quarterly, steadily ramping up through consistent annual hikes. Key milestones include jumps to $0.16 in 2014, $0.36 in 2018, $0.49 in 2021, $0.57 in 2023, and the current $0.62 following a 2025 increase. This reflects a 16-year streak of consecutive annual increases, with no cuts in over a decade. The long-term strategy supports shareholder returns amid global expansion, though growth has moderated recently to about 1.6% in the latest hike. Payments remain quarterly and reliable, aligning with the company's cash-generative store model.

Dividend Sustainability and Payout Ratio

Starbucks' payout ratio of 204.17%—calculated as the $2.48 annual dividend against $1.20 trailing twelve-month EPS (earnings per share)—indicates dividends exceed current earnings. Free cash flow coverage is strained, with levered FCF at -$1.44 billion over the trailing twelve months, partly due to investments and turnaround initiatives. Debt levels around $15 billion add leverage risk, though operational cash flow remains robust. Recent Q1 fiscal 2026 results showed revenue growth, but margin compression and high payout suggest monitoring for potential adjustments. Overall financial stability supports continuity short-term, but sustained earnings recovery is key for long-term viability.

Dividend Compared to Industry Peers

In the quick-service restaurant industry, Starbucks' 2.51% forward yield holds steady against peers. McDonald's (MCD) offers a similar 2.48% yield on its $7.44 annual dividend, bolstered by a longer Dividend Aristocrat history. Yum! Brands (YUM) trails at approximately 1.8% with $3.00 annually, while Domino's Pizza (DPZ) typically yields under 1.5%. SBUX's profile—modest yield with growth emphasis—positions it as average, appealing to investors seeking brand strength over top-tier income.

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Is This Stock Attractive for Dividend Investors?

Starbucks (SBUX) suits dividend growth investors who prioritize long-term payout escalation over immediate high yields, given its 16-year increase streak and global brand moat. Those comfortable with consumer discretionary cyclicality—tied to spending trends and competition—may find the 2.51% yield and quarterly cadence appealing for portfolio diversification. However, conservative income seekers or those demanding low payout ratios (<60%) might hesitate due to the elevated 204% ratio and negative FCF, which heighten cut risks amid turnaround efforts. Long-term holders betting on operational recovery and store expansion could view it as a moderate-risk growth play with income upside, but volatility in earnings warrants caution. Balanced portfolios might allocate modestly, monitoring Q2 fiscal 2026 results for coverage improvements.

Disclaimer

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