Starbucks reports frothy profits

Shares of the coffee chain hit all-time highs Wednesday on a fantastic earnings report.

By Motley Fool Investor Beat Oct 31, 2013 4:55PM
Starbucks (SBUX) reported fourth-quarter earnings on Wednesday, with profits up a jaw-dropping 34%.

The company delivered several other impressive numbers as well, including a 7% increase in global same-store sales and a 13% increase in revenue -- no small feat for a company of Starbucks' size. Shares of Starbucks hit a new all-time high Wednesday on the news, but pulled back slightly in trading Thursday.

However, despite the soaring new highs for Starbucks' stock and the company's price to earnings ratio near 39, Motley Fool One analyst Jason Moser still views this stock as a strong buy today.

He still sees growth ahead, and notes the tremendous amount of cash Starbucks brings in. Jason also expects to see continued dividend increases for the foreseeable future, and strongly believes this is a stock investors can buy and hold on to almost indefinitely, as he sees the demand for that cup of coffee in the morning as an investing thesis that won't be changing anytime soon.A Starbucks Corp., sign is displayed outside a coffee shop in London, U.K. / Chris Ratcliffe/Bloomberg via Getty Images

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