Starbucks(US:SBUX) The Motley Fool·2026-02-11 01:25Core Viewpoint - Starbucks' dividend growth, which has seen a remarkable increase of 1,140% since its first dividend in 2010, is expected to come to an end, with signs indicating a halt in dividend hikes later this year [1][2]. Dividend Growth Trends - From 2010 to 2020, Starbucks averaged a 24.5% annual increase in dividends, but growth has significantly slowed since 2021 [4]. - The quarterly payouts and annual dividend increases from 2021 to 2025 are as follows: - 2021: $0.49 per share, 8.9% increase - 2022: $0.53 per share, 8.2% increase - 2023: $0.57 per share, 7.5% increase - 2024: $0.61 per share, 7% increase - 2025: $0.62 per share, 1.6% increase [5]. Financial Indicators - The payout ratio has surged above 200%, indicating that Starbucks is spending more than twice its net income on dividends, which raises concerns about sustainability [6][8]. - Cash flow from operations has decreased from approximately $5.6 billion a year ago to just under $4.3 billion currently, further complicating the dividend outlook [9]. - Starbucks has not repurchased shares since 2024, and the employee stock investment plan is increasing the number of shares outstanding, which dilutes the share price [11]. Market Context - The current market capitalization of Starbucks is $113 billion, with a current price of $97.54 and a dividend yield of 2.48% [13]. - The suspension of the buyback program in 2022 by the then-CEO Howard Schultz has contributed to a decline in share prices, as cash was redirected towards operational investments [13].