- Starbucks’ 2.88% forward yield stands out, but slowing cash flow pressures dividend safety.
- The payout ratio above 200% raises concerns of a potential freeze or cut in 2026.
- Turnaround efforts are improving comps, yet earnings recovery remains key for dividend stability.
Starbucks enters its February 13 ex-dividend date with a 2.88% forward yield and a quarterly payout of 62 cents per share. The yield remains attractive for investors tracking SBUX dividends, especially relative to its five-year average.
Still, the broader outlook reveals rising uncertainty that income investors cannot ignore.
Dividend Situation Stable for Now but Under Pressure
Starbucks has increased its dividend for more than 15 years, nearing Aristocrat status. The pace of dividend growth, however, has slowed meaningfully.
The latest bump of just 1.6 percent for 2025 marks one of the smallest increases in its history. Analysts warn that Starbucks’ payout ratio has climbed above 200 percent according to in a recent assessment, a level that is difficult to sustain unless earnings rebound.
At the same time, operating cash flow declined from 5.6 billion dollars to 4.3 billion dollars over the past year. This deterioration limits financial flexibility and reduces dividend safety.
The same analysis notes that dividend growth has nearly stalled in the latest review, adding to concerns that Starbucks may freeze or even cut its payout in 2026.
Upcoming Dates and Near Term Trading Dynamics
With the February 13 ex-dividend date, investors who buy shares afterward will not receive the February 27 payout. Samsung expects Starbucks stock to drop about 0.64 percent at the open to reflect the dividend, as outlined in expected price adjustments.
Short-term traders may focus on predictable price movements, while long-term dividend investors will concentrate on sustainability of SBUX dividends rather than minor trading dynamics.
Turnaround Efforts Offer Hope but Not Immediate Safety
CEO Brian Niccol’s initiatives appear to be gaining traction. Same-store sales improved with comps rising 4 percent year over year in the update on improving comps.
This progress has helped the stock climb 18 percent year to date, reflecting a degree of renewed confidence. Yet earnings have not fully recovered, and the current dividend level remains stretched.
The temporary pause in buybacks has also allowed mild dilution to build, adding another layer of pressure on per-share earnings.
What Income Investors Should Consider
Starbucks continues to offer a globally recognized brand, stable customer base, and a yield above its historical average. Investors drawn to SBUX dividends, however, must also weigh near-term challenges.
- Dividend safety is weak as cash flow trends lower and the payout ratio sits far above typical thresholds.
- Management may decide to freeze or cut the dividend later in 2026 to preserve cash.
- The turnaround appears promising but may require several quarters to materially lift earnings.
- The stock may remain volatile if income-focused holders reposition ahead of a potential dividend adjustment.
Investors comfortable with uncertainty and confident in Starbucks’ multi-year recovery may find today’s yield appealing. More conservative dividend investors may prefer to wait for clearer signs that cash flow stabilization can support the current payout.
