Head-To-Head Contrast: Starbucks (SBUX) and Its Competitors

Starbucks (NASDAQ:SBUX) is one of 382 public companies in the “Hotels, Restaurants & Leisure” industry, but how does it compare to its competitors? We will compare Starbucks to similar companies based on the strength of its institutional ownership, analyst recommendations, dividends, earnings, risk, profitability and valuation.

Valuation & Earnings

This table compares Starbucks and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Starbucks	$37.91 billion	$2.53 billion	47.70
Starbucks Competitors	$3.64 billion	$250.18 million	-154.96

Starbucks has higher revenue and earnings than its competitors. Starbucks is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Starbucks pays an annual dividend of $2.52 per share and has a dividend yield of 2.4%. Starbucks pays out 114.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.2% and pay out 39.1% of their earnings in the form of a dividend. Starbucks has increased its dividend for 15 consecutive years. Starbucks lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional & Insider Ownership

72.3% of Starbucks shares are held by institutional investors. Comparatively, 48.7% of shares of all “Hotels, Restaurants & Leisure” companies are held by institutional investors. 0.0% of Starbucks shares are held by company insiders. Comparatively, 22.1% of shares of all “Hotels, Restaurants & Leisure” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Starbucks and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starbucks	6.66%	-38.61%	10.40%
Starbucks Competitors	8.52%	-40.63%	2.09%

Analyst Recommendations

This is a summary of current recommendations and price targets for Starbucks and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starbucks	4	15	21	0	2.42
Starbucks Competitors	3807	17285	25595	906	2.50

Starbucks currently has a consensus target price of $108.89, indicating a potential upside of 3.30%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 58.58%. Given Starbucks’ competitors stronger consensus rating and higher probable upside, analysts clearly believe Starbucks has less favorable growth aspects than its competitors.

Volatility and Risk

Starbucks has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Starbucks’ competitors have a beta of 1.44, meaning that their average share price is 44% more volatile than the S&P 500.

Summary

Starbucks competitors beat Starbucks on 9 of the 15 factors compared.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.