Question

Assume you have $20,000 to invest in the stock market. Which company would you invest in, Starbucks or Dunkin Donuts? Give supporting calculations to back up your decision.

Answer 1

I would like to invest into Starbucks company. Starbucks has a solid market nearness and brand picture. They have a piece of the pie of 35% in the US Coffee and tidbits retail showcase share1, commanding the café advertise. Many are acquainted with Starbucks' logo as the most perceived brand in the espresso advertise, making stores simple to spot and recognize for clients

At the national level, Starbucks leads with about 14,000 locations compared to the nearly 9,200 Dunkin' Donuts locations in the U.S. Starbucks plans to open another 3,400 stores in the U.S. by 2021 and double down on markets such as China, while Dunkin' plans to open 1,000 net new stores by the end of 2020. Starbucks has expanded beyond the U.S. more extensively, with more than 24,000 stores in 75 different markets, as of February 2019. Dunkin' Brands has a substantial international presence, though many of its international locations are Baskin-Robbins ice cream stores rather than Dunkin' Donuts stores. While only 3,397 Dunkin' Donuts stores exist outside the U.S., the company boasts 5,422 international Baskin-Robbins locations, compared to its 2,560 U.S. stores.

Dunkin' Donuts international revenue in 2018 contributed less than 4 percent of total sales, while roughly 30 percent of Starbucks' consolidated net revenues in the same period were attributed to markets outside of the Americas

Starbucks thinks its new stores can drive results just as well as its more established locations, and they ought to support top-line growth in the high single-digits. Aiding that is mid single-digit same-store sales growth, although it's missed that target in its most recent quarters. It's targeting $35 billion in revenue by 2021, up from $21 billion in 2016. That implies annual growth of over 10%