Loyal customers make Starbucks a buy

Article Excerpt

These two U.S. beverage-related stocks are taking steps to improve their long-term sales. We still like the outlook for both, as these actions should let them keep raising your dividends. However, we feel Starbucks, with its strong customer loyalty and international growth plans, is less vulnerable to competition from cheaper, generic brands. PEPSICO INC. $177 is a hold. The company (Nasdaq symbol PEP; Conservative-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding: 1.4 billion; Market cap: $247.8 billion; Dividend yield: 3.1%; Dividend Sustainability Rating: Above Average; www.pepsico.com) is the world’s second-largest soft-drink maker after Coca-Cola. Its other brands include Frito-Lay snacks, Gatorade sports drinks, and Quaker Oats cereals. PepsiCo will raise your quarterly dividend by 7.0% with the June 2024 payment. The annual rate of $5.42 a share yields 3.1%. The company has now increased the dividend annually for the past 52 years. Subway recently announced that in 2025, PepsiCo will replace Coca-Cola (New York symbol KO) as the beverage provider at its U.S. sandwich shops. This new…