Will Starbucks Raise Its Dividend in 2016? презентация

Corporation

was a record-setting year:

Record revenue and net income of $19.2 billion and $2.8 billion, respectively.
In Q4 2015, each business segment achieved operating income margin in excess of 15% for the first time in company history.
Highest ever annual free cash flow
of $2.4 billion.

to our shareholders through a combination of dividends and share buybacks, up over 50% from 2014 levels. And today, we announced that our board has approved a 25% increase in our quarterly dividend to $0.20 per share.”

--Starbucks CFO Scott Maw, Fiscal Q4 2015 Earnings Conference Call

has been even more aggressive in returning excess cash than CFO Maw indicated. During the three-year period, it’s nearly doubled payouts to shareholders:

Mermaid image: Starbucks Corporation

$0.78 billion
Share repurchases: $0.76 billion
Total: $1.54 billion

2013
Dividends: $0.63 billion
Share repurchases: $0.59 billion
Total: $1.22 billion

Fiscal years 2015, 2014, and 2013:

of 10%+.
Global comparable sales growth “somewhat above mid-single digits.”
1,800 global store openings.
Operating margin to increase slightly versus prior year.

in 2016. Any dividend increase will be at the discretion of management and the company's board of directors.

and equipment, which includes fixed assets tied to store expansion, before making payments to shareholders. Capital expenditures, or “CAP-EX,” come before cash shareholder returns in priority.

billion. If the company generates similar operating cash flow to fiscal 2015 ($3.7 billion), it will have ample cash left after CAP-EX to fund the roughly $1.16 billion in dividends declared for next year. This also bodes well for the announcement of a dividend increase in calendar year 2016.

as a percentage of net income. Starbucks’ recent payout ratio calculates to a quite manageable 35%.
Yield: Starbucks’ increasing stock price keeps depressing its dividend yield, which is currently at 1.33%. A 2016 increase in dividend will help the yield keep pace with a rising share price.

underpinnings are currently quite solid.
There are ample resources for another dividend increase to be declared during the latter part of calendar year 2016, which will be effective for fiscal 2017.
Thus, it’s highly likely that, barring unforeseen issues, Starbucks Corporation will continue to share its spoils with shareholders, and declare another dividend increase next year.

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