Starbucks Corp., a Seattle-based national coffee giant, recently announced that the company will begin paying dividends in the amount of 10-cents-per-share to investors. The company also stated that its board of directors has approved a plan to buy back 15 million shares, in addition to the 6.3 million shares Starbucks still has remaining authorization to buy under a previous effort. Starbucks officials said the dividend will be first paid in cash to investors on April 23 to shareholders who own stock April 7.
After shutting hundreds of locations and laying off thousands of workers to cut costs in 2008, Starbucks has tried to make over its image by focusing on some of its cheaper drinks and adding more localized offerings. As a result, Starbucks’ profit jumped 24 percent and in the past year its share price has more than doubled.
Troy Alstead, chief financial officer of Starbucks, stated, “We are confident in the overall financial strength of our business and the strong cash flow it continues to generate.”
Future dividends will require approval from company’s board of directors but executives said they anticipate future payouts will range from 35 to 40 percent of its net income. Starbucks shares rose 29 cents, or 1.1 percent, to $25.70 per share earlier this week.