Once a high-flying growth company with a valuation multiple and stock price trajectory to prove it, Starbucks Corporation (NASDAQ:SBUX) has since fallen off the radar for most growth-focused investors due to the company’s recent divestitures of its online store and Teavana stores amid a bid to improve profitability. The divestitures, while expected to lower revenue forecasts moving forward, should bolster a bottom line which has somewhat stagnated of late. Starbucks’ brand is one which continues to provide the company with a steady stream of cash flow growth in its primary markets, growth the company has used to continue to open company owned and operated stores in new markets around the globe. Expanding into key European and Asian markets has remained the focus for Starbucks brass, a goal which will require a significant amount of focus on building out distribution networks in said areas. International growth, while costly in the short-term, should continue to provide investors with an impressive long-term growth trajectory expected of Starbucks as North American growth continues to slow. With a current valuation multiple now in line with its peers, I see Starbucks as a newfound value play given its unique fundamentals in an industry with significant room for growth. Looking past existing stores to new international markets, Starbucks should be able to continue to grow its relatively meager dividend, returning value to shareholders in much the same way other mature businesses often do – something I look forward to seeing. Invest Wisely, my friends.
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