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Starbucks Corporation (SBUX): One of the Best Dividend Stocks to Buy for Long-Term Passive Income

When most people think of Starbucks, they think about coffee, cozy cafes, and maybe even pumpkin spice lattes.
But when I think of Starbucks, I see something even better: a potential gold mine for long-term passive income.

Let me tell you why Starbucks (ticker symbol: SBUX) has earned a place on my watchlist for building steady wealth—and why it might deserve a spot on yours too.

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Why Dividend Stocks Matter to Me

Before we dive into Starbucks specifically, I want to share a quick personal story.
When I first started investing, I was obsessed with finding "the next big thing." I wanted to double my money overnight.
Guess what happened? I mostly lost it.

Over time, I learned that slow and steady really does win the race. Dividend stocks became my new best friends.
They pay you simply for owning them, and if you choose the right companies, those payments can grow over time.

That's why Starbucks caught my eye.

The Magic of Starbucks

Starbucks is more than just a coffee shop. It's a brand people love and trust around the world.
Every morning, millions of people line up for their favorite drinks. It’s become a habit—almost a need—for so many.

Here’s why that matters: habits create predictable revenue.
When a company has loyal customers spending money consistently, it becomes very powerful, especially for dividend investors.

Starbucks sells affordable luxury.
Even during economic downturns, people still treat themselves to a $5 coffee.
It’s a little escape from reality, and it keeps Starbucks' cash registers ringing, no matter what the economy is doing.

Starbucks as a Dividend Payer

Now, let's talk dividends.

Starbucks started paying dividends back in 2010. Since then, it’s not just paid them—it’s grown them.
In fact, Starbucks has increased its dividend every single year since it started.

Let me repeat that: every single year.

For someone like me who’s focused on building long-term passive income, that's huge.
A company that grows its dividend year after year means my income grows too—without me lifting a finger.

Currently, Starbucks offers a dividend yield that's attractive but not sky-high.
That’s a good thing. Super high yields can sometimes be a red flag.
I'd rather have a moderate yield that's safe and growing than a risky yield that might get cut.

How Starbucks Makes Its Money

One thing I always ask before investing is: how does this company actually make money?

With Starbucks, it’s straightforward:

• They sell beverages, food, and merchandise in their stores.

• They license their brand to other stores and airports.

• They sell Starbucks-branded products like coffee beans in grocery stores.

This diversity helps them stay strong. If one part of the business struggles, the others can help pick up the slack.

Also, Starbucks has a very smart loyalty program called Starbucks Rewards.
Members load money onto the app, and Starbucks holds billions of dollars in prepaid funds—kind of like a free loan from customers!
This gives Starbucks even more financial strength.

The Global Opportunity

Another thing I love about Starbucks is that it’s still growing internationally.
In the U.S., Starbucks is everywhere, but in places like China, India, and other emerging markets, there’s still massive room for growth.

And Starbucks is smart about it.
They partner with local companies and adapt their menus to different cultures.
For example, in China, you might find Starbucks offering green tea lattes and red bean drinks.

By expanding wisely, Starbucks creates new sources of revenue that can help fuel future dividend increases.

Risks to Watch

Of course, no investment is perfect.
Starbucks faces challenges like:

• Rising labor costs

• Competition from other coffee shops

• Changes in consumer tastes

• Economic slowdowns

But when I weigh these risks against Starbucks' brand strength, loyal customer base, and smart leadership, I believe the potential rewards outweigh the risks.

And honestly, if people kept buying coffee during the 2008 financial crisis and during COVID-19 lockdowns, I’m pretty confident they'll keep buying it through future bumps too.

Why Starbucks Fits My Strategy

Here’s how Starbucks checks the boxes on my personal dividend investing checklist:

✅ Strong brand that customers love
✅ Growing revenue and profits
✅ History of raising dividends
✅ Global growth potential
✅ Solid balance sheet

I'm not looking for a quick flip.
I'm looking for steady cash flow for years and years to come.
Starbucks fits that goal perfectly.

A Quick Look at the Numbers

(These are rough numbers for illustration, always double-check before investing.)

• Current Dividend Yield: About 2.4%

• Dividend Growth Rate (past 5 years): Around 9% per year

• Payout Ratio: Around 60% (means they’re not paying out more than they earn)

• Cash Reserves: Strong enough to handle tough times

For me, this creates a recipe for growing passive income.

If you bought $10,000 worth of Starbucks today and reinvested the dividends over 20 years, you could potentially see your income snowball into something powerful—especially if Starbucks keeps raising its payout.

How I Would Start

If you’re thinking about adding Starbucks to your portfolio (like I am), here’s a simple plan:

1. Start with a small position: No need to go all-in.

2. Use dollar-cost averaging: Buy a little bit at regular intervals.

3. Reinvest dividends: Let the income buy more shares automatically.

4. Stay patient: Focus on years, not months.

5. Watch the business: Pay attention to quarterly reports but don’t panic over headlines.

Remember: the goal is long-term passive income, not overnight riches.

Other Dividend Stars Like Starbucks

While Starbucks is great, it’s smart to diversify.
Other dividend growers I like include:

• Johnson & Johnson (JNJ)

• Procter & Gamble (PG)

• McDonald's (MCD)

All of these companies have similar strengths: strong brands, reliable customers, and a history of rewarding shareholders.

My Personal Takeaway

Investing doesn’t have to be complicated.
Sometimes, it’s as simple as finding great companies, buying their stock, and holding on tight.

For me, Starbucks fits beautifully into that strategy.
It’s not just about loving coffee.
It’s about loving a business that can pay me real cash, year after year, while I focus on living my life.

Passive income = freedom.

And freedom is priceless.

Advice for You

If you're serious about building long-term wealth and passive income, here’s what I suggest:

• Look for businesses you understand: You don't need fancy jargon.

• Prioritize dividend growth over high yield: Growth builds wealth over time.

• Be patient: True investing happens over years, not weeks.

• Stay curious: Keep learning, but don’t let fear stop you.

Starbucks could be a wonderful starting point.
Maybe not flashy, maybe not exciting—but solid, reliable, and quietly powerful.

Final Takeaways

Building a portfolio that pays you while you sleep is one of the smartest financial moves you can make.
Starbucks offers a rare combination: strong brand loyalty, global growth, financial strength, and a proven commitment to rewarding shareholders.

I’m personally adding Starbucks to my list of top long-term holdings.
Not because I think it will double tomorrow, but because I believe it will steadily grow my income for years to come.

If you’re looking for a way to create real wealth and peace of mind, companies like Starbucks might just be the answer.

Here's to growing together—one coffee (and one dividend) at a time.

[Live Life Grow Wealth]

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.