My Top Dividend Stock For February
While there are actually quite a few good looking deals on the market right now (three of which I’m telling you about here), one company that has captured my attention again and, more importantly, my investment dollars is Starbucks (SBUX) — one of my largest positions and one of my favorite companies.
Source: getquin | My top five largest positions
The company’s share price has spiraled down nearly 13.5% in the last year, which may not seem like good news at first. But if you’re a long-term dividend investor like myself, this is cause for celebration because the lower share price means more bang for your buck and an opportunity to buy some shares at a better valuation.
As it currently stands, Starbucks’ P/E ratio is sitting at 22.37, nearly 38% below the 5-year average, and it’s possible that we’ll see an even better deal here in the near future.
The company is reporting their quarterly earnings on January 30th, and there have been some concerns about the holiday quarter being weaker than usual. If that ends up being the case, I wouldn’t be surprised to see the share price sink below $90, and am crossing my fingers for that to happen.
In the meantime, I’ve already started adding to my Starbucks position again, and just in the last couple of weeks have swooped up four more shares.
Source: getquin | My recent SBUX purchases
With that said, it's not merely the valuation that makes Starbucks a standout investment. Starbucks has one of the world’s strongest brands — a key competitive advantage that helps foster strong customer loyalty and strengthens the company’s market dominance.
As a somewhat frequent customer myself, I know how religious Starbucks customers are about making it a vital part of their daily routine. And similar to any routine, if one element is missing, everything else feels off.
In the case of Starbucks, skipping your morning coffee and egg bites on the way to work can throw off your entire day, and while spending $6 or $7 on a customized cold brew may seem like a poor use of capital, for the Starbucks loyals, it's a key element for survival.
The emotional connection that customers have with the company and its products is one of the things that sets Starbucks apart. These intangibles, though hard to put a number on, play an essential role in the company's resilience and long-term potential.
In my opinion, investing in Starbucks is not just a bet on overpriced coffee; it's an investment in the habitual nature of human beings — and some habits, no matter how expensive, are hard to break.
So, Starbucks is my top dividend stock pick for February, and now I want to hear from you: Which stocks do you have your eye on for this upcoming month? Write to me here and let me know.
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getquin gives you more features than any other platform I've seen, and I have a feeling it’s going to revolutionize the way I track my portfolio.
From tracking past and future dividends to in-depth diversification breakdowns based on geography, industry, and asset class (cash, real estate, crypto, etc.), everything you could want is right there — all neatly presented on what I think is the most intuitive and user-friendly interface out there.
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In my opinion, getquin is the perfect blend of sophistication and simplicity, and it reminds me of Robinhood but with more enhanced capabilities. Both the app and the desktop version of the platform have been awesome and easy to use.
One thing that makes getquin unique is the social aspect of the platform. There’s a (seriously) thriving community of over 200k investors on the platform sharing their portfolios, passing around stock research, and supporting each other on the path to financial freedom.
Overall, if you’re looking for something with more functionality than a spreadsheet, and are looking for another great place to connect with like-minded investors, getquin is definitely worth checking out and is free to join.
You can follow me on getquin (@ryne) to see all of my posts, check out my portfolio in real-time, and see all of my purchases + dividend payments as they come in.
IN MY PORTFOLIO 📈
ICYMI 🎥
3 Deeply DISCOUNTED Dividend Stocks To Buy In February 2024 💰
A great place to start when looking for potentially undervalued stocks is to look for negative share price performance and in this video, we’re talking about 3 stocks who’ve just been getting the pie beaten out of them and look like prime pickups for your portfolio as we head into February.
CAREFULLY CURATED 🔍
📺 Prime Dividend Cut Candidates - Dividend cuts are the worst, and if you plan on investing for any extended amount of time, you're likely to experience at least one of them yourself. Having said that, you'll want to check out this video from Russ Knopf who's sharing 10 dividend stocks that have an increased likelihood of cutting their dividend. Maybe you can avoid dividend cuts after all...
🎧 Emotions, Behavior, and Investing Success - If you've ever read, or heard of, the iconic investing book "The Little Book That Beats The Market," then you'll love this interview with the author, Joel Greenblatt, on the Wisdom, Wealth, and Wellness podcast.
📚 Active vs Passive Learning - Another classic by Morgan Housel. In this blog article, he explains the difference between active and passive learning, and advocates for the latter, in which you "let your mind wander with no intended destination."
SINCE YOU ASKED 💬
"Long story short, I am a 24 year old investor that is investing around $300-$500 a month. I plan on retiring early (hopefully), and I am unsure on whether to prioritize my taxable portfolio or my Roth, even though I can’t touch it until 59.5. Just hard to make a solid decision based on what I see on social media, especially considering I am not sure of all the factors that play into it. Any tips?"
- Will | Email Submission
This is such a great question, and I had these same exact thoughts when I first started investing.
At only 24 years old, I don't think retiring early is out of the question at all. Having said that, if you're really determined to retire early, and if you have a sensible plan for it, then it could make sense to put more money into your taxable account.
However, don't forget that you'll still be 59.5 years old someday. At that point, you're going to want as much tax-free income as you can possibly get, so I still believe having a Roth IRA is important. Even if you don't contribute the maximum amount initially, it's a smart move to at least start investing in one, and maxing it out is a good goal to work toward.
Another thing to keep in mind...you're only 24 years old. A lot can change between now and your planned retirement age. It's tough to predict what your life and expenses will be like 20-25 years from now, so your investing strategy will probably evolve over time.
Have a question? Ask me here to see it featured in an upcoming newsletter.
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DREAMING OF MORE DIVIDENDS? 💰
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