Starbucks vs Dow Which Is More Attractive?

Starbucks and Dow stocks are two popular investment options in the financial market. Starbucks, a global coffee chain, has seen significant growth and popularity over the years, making it an attractive choice for investors. On the other hand, Dow stocks represent a collection of 30 large, publicly traded companies that are considered to be stable and established. Both options offer unique opportunities for investors to diversify their portfolios and potentially earn returns. Understanding the differences and similarities between Starbucks and Dow stocks is essential for making informed investment decisions.

Starbucks or Dow?

When comparing Starbucks and Dow, 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 Starbucks and Dow.

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. Starbucks has a dividend yield of 2.32%, while Dow has a dividend yield of 6.67%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Starbucks reports a 5-year dividend growth of 10.35% year and a payout ratio of 68.73%. On the other hand, Dow reports a 5-year dividend growth of 0.00% year and a payout ratio of 185.20%.

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 Starbucks P/E ratio at 30.27 and Dow's P/E ratio at 27.79. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Starbucks P/B ratio is -15.28 while Dow's P/B ratio is 1.61.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Starbucks has seen a 5-year revenue growth of 0.75%, while Dow's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Starbucks's ROE at -46.35% and Dow's ROE at 5.76%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $98.44 for Starbucks and $41.73 for Dow. Over the past year, Starbucks's prices ranged from $71.55 to $103.32, with a yearly change of 44.40%. Dow's prices fluctuated between $41.73 and $60.69, with a yearly change of 45.43%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.