SBUX P/E Ratio (Forward 1y) data by YCharts
Just for some grounding, the current one-year forward P/E multiple for consumer-staples stocks in the S&P 500, according to Yardeni Research, is 20.0. So whether placed beside stumbling competitors, or among a broader spectrum of consumer-based companies, Starbucks is commanding a premium in the marketplace.
Investors who get caught up recalling the magic of 2015, in which Starbucks' stock soared and it seemed to distance itself from its peers, may find disenchantment if and when the company hits any natural retracement, through business performance or stock price. Some shareholders will cash in their profits at that point and seek another sandlot to play in.
But deserters beware! My second point is humbly offered. Of all the stocks I follow, Starbucks is perhaps the least relevant in trying to determine whether the next year will bring the utmost of fortune. That's because, if you sift through all the high quality companies which say they're playing a long game -- and this management team is no exception; they say so, literally -- the global coffee juggernaut stands out. Its executives both truly believe that the organization's investments will have an extended payback period for shareholders, and they've built a track record of delivering the same.
Perhaps it's because Starbucks' customer base swarms with repeat visitors, either through an experiential love or caffeine addiction, and building on this base isn't rocket science, once you focus resources on employees, technology, and business execution. Whatever the case, as I wrote recently, Starbucks exhibits a kind of aggression about the future . Excepting unanticipated external factors, it's better for shareholders to worry about other stocks in their portfolios for 2016. For Starbucks, look further ahead.
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The article Will 2016 Be Starbucks Corporation's Best Year Yet? originally appeared on Fool.com.
Asit Sharma has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
