Starbucks Transitions From a Growth Stock to a Dividend Stock
Just like people, every company has a life cycle. So what happens when you hit late adulthood? Do you start eating better, exercising, and proudly wearing your streaks of gray hair? Or do you get plastic surgery, dye your hair black, and start wearing that trendy T-shirt brand the high-school kids are wearing? Clearly, one is the prudent way to go about maturity, and the other is not.
In its Nov. 2 earnings report, Starbucks (NASDAQ: SBUX) reset long-held earnings per share targets, signaling to the market that it is not quite the high-growth world-beater it once was. That sent the stock down hard in after-hours trading. However, when the market digested how the company is transitioning to the next phase as a public company, sentiment turned, and the stock finished the week roughly 2% higher.
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Source: Fool.com