Starbucks Puts Excess Cash To Work

Posted by Rick Stine on March 24, 2010
Dividends, Investing, Stock Buyback

starbucksWe get reminders each day how far the economy and corporate Americas has snapped back – at least part of the way – from the depths of our great recession. Starbucks, which not long ago was going through a soul-searching to re-identify itself and cut costs (it closed many stores), announced today it was paying its first ever dividend. It is a modest 10 cent a share dividend, which will end up costing the company about $75 million. But the steps it took to improve profitability over the past year have allowed it to amass enough cash to not only pay out a dividend but authorize a new stock buyback program. It has grown its cash position pretty impressively. It had $1.35 billion of cash and short-term securities on its books at the end of December. That was up from $666 million in the quarter that ended September. Look for more companies to do the same thing.

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March 25, 2010

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