If you go to Starbucks virtually every day and get your vanilla latte you may understandably be interested in investing in the world-famous coffeehouse. Maybe you can get a little of your money back. Besides, Starbucks is an extremely successful company and a high-profile stock. The pandemic, supply chain issues and inflation have all taken their toll on Starbucks and numerous companies, but earnings at Starbucks are nonetheless up. Below, we go over how to invest in the company. You can also work with a financial advisor who can manage your portfolio and stock trades on your behalf.
First Decide Whether You Want to Buy Starbucks Stock
Actually making the stock purchase is the easy part. Before you purchase Starbucks stock, however, as with any investment, you’ll want to give this some thought. At the time of this writing, a share of Starbucks was selling for $88.25, not a fortune, but that would buy a lot of coffee for your budget.
Still, Starbucks is a large-cap stock, which describes a stock with a company that has a market capitalization value of over $10 billion. (Starbucks is worth around $100 billion.) Many investors like large-cap stocks for their stability.
Starbucks has been around since 1971. It started off as one coffeehouse in Seattle, and it wasn’t until the 1980s that the company began to transform into what people know it as today. Howard D. Schultz, now the chairman and CEO of Starbucks, joined the coffeehouse in 1982 and by 1986 was the CEO, a role he has had off and on since then. During the late 1980s and throughout the 1990s, Starbucks morphed into the national and then worldwide coffeehouse phenomenon that it is today.
Decide Where and How You Will Buy Starbucks Stock
Starbucks trades on the NASDAQ under the symbol SBUX. This stock is publicly traded and publicly listed, so you can purchase it without, for instance, being an accredited investor. There are generally several different approaches an investor could take to purchase shares of SBUX:
- You’ll either need an account with an online brokerage, such as Charles Schwab or E*TRADE, or you’ll want to take a look at some investment apps, in order to buy Starbucks stock. The Starbucks investor website recommends Interactive Brokers and Zacks Trade, which are both discount brokers, and Fidelity.
- If you work with one, your stockbroker can purchase Starbucks stock on your behalf.
- Depending on what financial institution you park your money in, you may be able to purchase Starbucks stock through your bank.
- You could also purchase Starbucks through the direct stock purchase plan administered by Starbucks’ transfer agent, Computershare. You can visit them online or contact Computershare by phone at 1-888-835-2866 (the US and Canada) and 1-201-680-6578 (Outside the US and Canada) or by mail to:
c/o Computershare Investor Services
P.O. Box 30170
College Station, TX 77842-3170
If you use Starbucks’s transfer agent, that can be a good way to start investing. You often don’t need a lot of money to start. Currently, the minimum amount of money you’ll need to invest in Starbucks is $500. But one of the downsides is that the ongoing fees can really nibble away at your profit, compared to investing apps and online brokerages, which can offer no-commission trades.
Hold the Stock Until You Want to Sell
As you can see, there are not a lot of steps when it comes to buying Starbucks stock, or any stock for that matter. But if you look at the process of buying any stock as a whole, you’ll see that each step is equally important:
- If you buy a company’s stock that continually underperforms, you’ll lose money, which is why beforehand research on the business is always prudent.
- If you buy stocks through a middleman that charges high fees any time you purchase, reinvest dividends or sell, you’ll lose money.
- If you sell the stock before it has a chance to grow, you may lose future earnings – or you may actually lose money if you sell before you make any profit.
Something else to keep in mind: Stick around for the long haul and don’t plan to sell for a while, and you probably will make some money with Starbucks (and with most large-cap stocks). According to Starbucks Investor Relations’ investment calculator, if you had purchased a share of Starbucks for $88.25 on Oct. 21, 2014, about eight years ago and about as far back as the investment calculator goes, at the time of this writing, today, without the dividends being reinvested, that money today would be worth $205.07.
The Bottom Line
In order to buy Starbucks stock you’ll need to work with a brokerage to make the trade for you. The question, really, is whether you should invest in SBUX or not. That is a question that requires an individualized answer as everyone’s financial plan looks a bit different. Traditionally, the stock has performed well over time but nobody can know if buying an $88.25 share of Starbucks’ stock will be worth far more in ten years, based on past performance, purchasing Starbucks stock is probably going to be a safe bet.
Tips for Investing
- It can be hard to figure out the right time to buy stocks, or even what types of stocks you should potentially invest in when trying to accomplish specific goals. You may want to consider working with a financial advisor who can help you determine how to reach your financial goals and manage your portfolio for you. Finding the right financial advisor doesn’t have to be difficult either. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you’re not sure whether you should put money into large-cap stocks then you may want to see what your portfolio could look like if you did. Use our asset allocation calculator to see just that. It can help you choose the right asset mix for your portfolio.
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