Better Buy: Luckin Coffee or Starbucks?

Luckin Coffee (NASDAQ: LK), the Chinese coffee store chain that went public in May, has repeatedly claimed that it will eclipse Starbucks' (NASDAQ: SBUX) store count in China. Luckin's growth rate indicates that could happen soon: Its number of stores surged 210% annually to 3,680 last quarter, while Starbucks' store count grew 17% to 4,125.

But there's a key difference between Luckin and Starbucks: Luckin is deeply unprofitable, while Starbucks generates stable profits and pays a 2% dividend. Should investors take a chance on the unprofitable newcomer with triple-digit revenue growth, or stick with the well-established leader?

Image source: Getty Images.

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Source Fool.com