Better Stock to Buy Right Now: Dutch Bros vs. Starbucks

Approximately 66% of Americans drink coffee daily. Of that percentage, more than 80% drink two or more cups. Coffee is a big business, to say the least. Over the past couple of years, the U.S. coffee market exceeded $100 billion.

The coffee industry is fiercely competitive as it clamors for our love of caffeine. Starbucks (NASDAQ: SBUX) is a global franchise working to return to its status as a beloved "third place" in society -- a distinct social space, separate from home and work. Dutch Bros (NYSE: BROS) is a fast-growing drive-thru chain aggressively expanding its market share.

Which stock is the better buy right now?

Dutch Bros is expanding its footprint and treats

Dutch Bros is a Pacific Northwest-based drive-thru coffee company that is rapidly growing. In fiscal year 2025, Dutch Bros increased its revenue 27.9% year over year. The company opened 154 new shops across 22 states. Lastly, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 31.4% compared to the previous year.

Image source: Getty Images.

Dutch Bros is now developing a hot food menu to attract and retain even more customers. This addition will allow the chain to directly compete with breakfast and coffee staples such as Starbucks and Dunkin'.

The stock hasn't fared well over the past 12 months, though, declining nearly 15%. However, Goldman Sachs just upgraded Dutch Bros from neutral to buy.

Starbucks misses you

Last year was not easy for Starbucks. For the 2025 fiscal year, global comparable-store sales declined by 1%. Consolidated net revenues increased 3%, but operating margin fell precipitously amid the closing of more than 400 stores in North America.

Starbucks CEO Brian Niccol wants his "Back to Starbucks" restructuring plan to reestablish the brand as a pleasant coffee shop where you are welcome to sit and stay. Through menu simplification and in-store remodels, Starbucks has been busy implementing this strategy since late 2024.

The strategy's anticipated effectiveness is reflected in the company's 2026 guidance. Starbucks expects comparable-store sales growth of 3% or more, along with a slight improvement in margins.

Starbucks is also opening between 600 and 650 new coffeehouses globally this year. The stock rose 19% thus far in 2026. Its forward P/E ratio of 43 means Starbucks could be slightly overvalued.

What's the tea? Starbucks or Dutch Bros?

Ultimately, both stocks are showing bullish signs, but for different reasons. The winner depends on whether you are primarily a growth investor or a value investor.

For the growth investor, Dutch Bros is quickly opening new stores, and its financials are improving. With the stock down over 15% year to date, its price is becoming more attractive to long-term investors.

Starbucks is better suited to value investors, as it's already a large global company that pays a dividend. It's also likely to grow only modestly in the coming years. Starbucks' turnaround strategy should keep the company relevant and strong for years to come.

Depending on your goals, both stocks are solid choices.

Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dutch Bros, Goldman Sachs Group, and Starbucks. The Motley Fool has a disclosure policy.