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Starbucks to Pay First Dividend of 10 Cents a Share

Starbucks will begin paying a 10-cents-per-share cash dividend to investors, the coffee giant said Wednesday.

Starbucks
Starbucks

The Seattle company also said that its board of directors approved a plan to buy back 15 million shares—in addition to the 6.3 million shares the company still has remaining authorization to buy under a previous effort.

Wednesday's news comes as the company prepares to hold its annual shareholder meeting, which will begin in the afternoon, in Seattle. There, CEO Howard Schultz is expected to brief investors on the company's business strategies.

Starbucks officials said the dividend will be first paid in cash to investors. It will be paid on April 23 to shareholders who own stock as of April 7.

"We are confident in the overall financial strength of our business and the strong cash flow it continues to generate," Chief Financial Officer Troy Alstead said in a statement.

Future dividends will need approval from the company's board of directors. But executives said they hope future payouts will range from 35 to 40 percent of its net income.

Starbucks shares rose 64 cents, or 2.5 percent, to $26.05 in pre-market trading Wednesday. Shares closed Tuesday at $25.41. Click here for real time quotes on Starbucks shares.