5 Reasons Why Starbucks Is a Top Dividend Stock to Buy in 2025

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At the time of this writing, Starbucks (NASDAQ: SBUX) has tumbled a painful 8.7% over the past week -- likely due to soaring Arabica coffee bean prices and a broader market sell-off.

Starbucks is down year to date despite gains in the broader indexes, but the company could be turning the corner. Here are five reasons why Starbucks is a quality dividend stock worth buying in 2025.

A person smiles while holding a mug and looking out a window.
Image source: Getty Images.

1. A recovery is well underway

On Aug. 13, Starbucks stock gained almost 25% in response to news that Brian Niccol would take over as CEO. The move showed just how badly the company needed a leadership change. Niccol's impeccable track record as CEO of Chipotle Mexican Grill should translate well to Starbucks.

In late October, Niccol led his first earnings call as Starbucks' CEO, discussing several strategies that would take the company back to its roots. Starbucks pioneered restaurant mobile apps and mobile ordering, which boosted sales volume and margins and allowed customers to skip the line and save time. But mobile ordering also made the Starbucks experience more transactional, and strained employees who became overwhelmed with mobile orders during peak periods.

A key aspect of Niccol's strategy is to return Starbucks to being a "third place," away from work and home, where folks can relax and enjoy the experience of a handcrafted beverage. Returning to a third place involves improving the quality of its food and beverage offerings and the customer and employee experience. The strategy also involves not price-pinching on certain items. For example, Starbucks has made nondairy cream options free again, and is bringing back condiment stations so customers can spruce up their drinks.

The strategy makes a ton of sense on paper, but may be more challenging to implement than investors initially realized. Starbucks must balance restoring its brand with not hurting the improvements that contributed to rapid sales growth in recent years. The realization that further improvements could take time may be why the stock price has gone practically nowhere since Niccol's announcement in August.

2. Starbucks has identified ways to boost efficiency

Long-term investors know that good things take time. When turning a business around, it's far more important to get a strategy right and chart a path toward sustainable future growth than to rush the process and have to restart the turnaround.

Starbucks has a lot of momentum going into the new year. As you can see in the chart, sales are near an all-time high, and operating margins have fully recovered from the COVID-19 pandemic:


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