Luckin Coffee vs Starbucks Which Is More Lucrative?

Luckin Coffee and Starbucks are two major players in the global coffee industry, but they have seen significant differences in their stock performance. Luckin Coffee, a Chinese-based coffee chain, gained popularity for its rapid expansion and innovative business model. However, the company faced a major scandal in 2020, leading to its delisting from the NASDAQ. On the other hand, Starbucks has maintained a strong presence in the market and continues to see steady growth in its stock value. It will be interesting to see how these two companies continue to compete in the future.

Luckin Coffee or Starbucks?

When comparing Luckin Coffee and Starbucks, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Luckin Coffee and Starbucks.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Luckin Coffee has a dividend yield of -%, while Starbucks has a dividend yield of 2.36%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Luckin Coffee reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Starbucks reports a 5-year dividend growth of 10.35% year and a payout ratio of 68.73%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Luckin Coffee P/E ratio at 23.22 and Starbucks's P/E ratio at 29.68. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Luckin Coffee P/B ratio is 5.28 while Starbucks's P/B ratio is -14.99.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Luckin Coffee has seen a 5-year revenue growth of 16.49%, while Starbucks's is 0.75%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Luckin Coffee's ROE at 26.51% and Starbucks's ROE at -46.35%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $24.00 for Luckin Coffee and $97.95 for Starbucks. Over the past year, Luckin Coffee's prices ranged from $17.28 to $29.49, with a yearly change of 70.66%. Starbucks's prices fluctuated between $71.55 and $103.32, with a yearly change of 44.40%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.