Starbucks Stock Is Soaring This Year, and It Still Boasts an Attractive Dividend Yield. Time to Buy?

Shares of Starbucks (NASDAQ: SBUX) have climbed about 25% so far in 2026 as of this writing -- a wide lead on the S&P 500's nearly 5% gain over the same period. The latest leg up came earlier this week, when the coffee chain reported its fiscal second-quarter results and CEO Brian Niccol said his "Back to Starbucks" turnaround had reached an inflection point. Shares ripped to a fresh 52-week high.

Even after the rally, the stock arguably looks good -- especially as a dividend stock. In fact, shares still pay a dividend that yields about 2.4%.

So, is it time to buy?

Image source: Starbucks.

The turn in the turnaround

For the first time in more than two years, Starbucks delivered growth on both the top line and the bottom line in fiscal Q2 (the period ended March 29, 2026). Consolidated revenue for the period rose 9% year over year to $9.5 billion, while non-GAAP (adjusted) earnings per share climbed 22% to $0.50.

But it's the momentum behind those numbers that may have caught investors' attention. Starbucks' global comparable store sales increased 6.2%, led by a 3.8% gain in transactions. That's a meaningful acceleration from the 4% global comp Starbucks posted in fiscal Q1, which itself was up sharply from the 1% growth posted in the fourth quarter of fiscal 2025.

The pickup was even more pronounced in North America, where comparable store sales rose 7.1% on a 4.4% jump in transactions.

In other words, more customers are coming into Starbucks stores -- and more often.

"We haven't seen this transaction strength in three years," Niccol said during the company's fiscal second-quarter earnings call.

And margins, which management had said would lag the top-line recovery, are starting to come along too. The company's adjusted operating margin expanded 120 basis points year over year to 9.4% -- and GAAP operating margin widened 180 basis points to 8.7%.

Strength in transactions, paired with cost discipline, is finally showing up in earnings.

Confident enough in the trajectory to take up the outlook for the year, Starbucks raised its fiscal 2026 guidance for global and U.S. comparable store sales growth to at least 5% (from 3%) and lifted its adjusted earnings per share range to $2.25 to $2.45 (from $2.15 to $2.40).

Even more, Niccol said comparable-store sales trends had continued to trend positively through April.

Even after the run-up, an attractive dividend

And the stock continues to look attractive -- at least for investors looking for income.

Sure, the stock's roughly 25% year-to-date climb has compressed Starbucks' dividend yield. But the payout still looks attractive. With the board declaring another $0.62 quarterly dividend earlier this month -- payable in late May -- the annualized payout of $2.48 works out to a yield of about 2.4% as of this writing.

Further, the coffee giant's dividend durability looks pretty good, too.

The company has now paid a dividend for 64 consecutive quarters, with a compound annual growth rate of about 17% over that span.

That's a long track record of raises -- and one Starbucks signaled it intends to defend. On the fiscal second-quarter earnings call, chief financial officer Cathy Smith said the company's capital allocation philosophy reflects "a disciplined approach across three priorities: strategically investing in the business, maintaining a competitive dividend and returning excess cash to shareholders, supported by our investment-grade profile."

Worth noting, however, is that share repurchases have been on hold.

Starbucks made no common-stock buybacks in fiscal 2025 or in the first half of fiscal 2026. Management has prioritized funding the Back to Starbucks plan and tending to the balance sheet and strategic investments, including a recently closed joint venture with Boyu Capital, with the private equity firm acquiring a 60% stake in Starbucks China.

But has the stock's valuation become too expensive after rising so sharply this year?

It's getting close.

Starbucks currently trades about 45 times the midpoint of management's adjusted earnings per share guidance range. Sure, that's a steep multiple for a turnaround that, in Niccol's own words, still has "more work to be done." If consumer spending softens or comp momentum cools, shares could see a meaningful pullback.

However, for income-focused investors looking for a recognizable consumer brand with a steady, well-supported dividend, Starbucks could remain a stock worth buying here. But for investors hoping for market-beating returns, the stock may be worth passing on after its recent run-up.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Starbucks. The Motley Fool has a disclosure policy.