Coffee giant Starbucks is on an upswing: In April, it reported fiscal second-quarter earnings that beat analysts' expectations, and its stock is up nearly 30% for 2019. The current share price is hovering around $83.
If you invested in the company 10 years ago, that decision would have paid off. A $1,000 investment made June 19, 2009, would be worth nearly $14,000 as of June 19, 2019, for a total return of about 1,300%, according to CNBC calculations.
Over the same period, the S&P 500 has returned just over 280%.
Part of the reason for the stock's uptick has been solid sales: Starbucks' same-store sales increased by 3% in the fiscal second quarter, more than analysts expected. Earnings per share also topped Wall Street's expectations.
And many analysts predict Starbucks could keep rising. JC O'Hara, chief market technician at financial planning firm MKM Partners, said in May on CNBC's "Trading Nation" that Starbucks' upward trend was just getting started: "I think this is a perfect example of an area where we don't want to be afraid of momentum.
"When stock charts like these hibernate for an extended period of time and finally break out, that breakout is powerful, and it can continue a lot longer than many people think is possible."
CNBC: Starbucks stock as of June 18, 2019
It doesn't hurt that in May the coffee chain received what was estimated to be more than $2 billion in free advertising and publicity after a cup with what appeared to be a Starbucks label appeared in an episode of HBO's "Game of Thrones." (It doesn't matter that it turned out not to be a Starbucks cup.)
"This is a once-in-a-lifetime collision of opportunity for Starbucks," said Stacy Jones, CEO of marketing company Hollywood Branded. Jones pointed to public relations subscription service Critical Mention, which tallied more than 10,000 mentions of Starbucks and "Game of Thrones" online, on TV and on radio.
"This is just the tip of the iceberg," she said, "because what isn't being monitored or estimated is the word of mouth and social media on top of this."
While Starbucks' stock has performed well over the years, any individual stock can over- or underperform, and past returns do not predict future results.
The company is facing stiff competition overseas from Chinese rival Luckin Coffee, which recently went public, and whose strong initial sales have captured the attention of Wall Street analysts.
Luckin has sold more than 110 million cups of coffee since being founded less than two years ago, according to KeyBanc Capital Markets. In addition, the company opened 2,370 stores in China and plans to add 2,500 more in 2019.
Still, Starbucks is investing heavily in its future. In just four months, the company added delivery to 2,100 stores in China and is planning to launch mobile order and pay later this year. Starbucks Rewards also reached 8.3 million active Chinese members.
The company also recently launched a monthlong trial of a reusable cup program at Gatwick Airport in London, and it's continuing its focus on creating better in-store experiences, developing new beverages and fine-tuning its digital capabilities throughout the U.S. and China.
"We have gone from a long-cycle innovation approach to one that embraces the mantra of going from idea to action in 100 days and then learn and adapt," CEO Kevin Johnson said of the company's new Seattle-based innovation hub, the Tryer Center.
"That's all about creating the entrepreneurial spirit and by doing that, it's unleashing the passion, the creativity and the energy … to accelerate the velocity of new things that show up in our stores."
If you're looking to get into investing, seasoned investors such as Warren Buffett suggest you start with index funds, which hold every stock in an index, meaning they're automatically diversified and tend to be low cost. Plus, because they fluctuate with the market, they're typically less risky than picking individual stocks.
Here's a snapshot of how the markets look now.
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Video by Claire Nolan
