Starbucks Dividend Culture Experiment

Starbucks (SBUX) announces a first ever ten cent @ share dividend. The CFO Troy Alstead issues the dividend signal with this comment “We are confident in the overall financial strength of our business and the strong cash flow it continues to generate”

The CEO Howard Schultz will update investors on its turnaround strategy and what's next for the jumbo brand later today. At the same time they will expand their share repurchase program. The stock is near its 52 week high and they need to boost it into a higher stratosphere.

The key statement which comes on the same day as their annual meeting is that they are targeting a payout of 35 to 40% of net income. Net income has been a roller coaster in the past.

Dividend oriented investors are not interested in roller coasters.

Starbucks will need to manage itself very differently to satisfy dividend oriented investors.