We have interesting news for Starbucks stock investors, as the company has announced the closure of an additional 250 stores. And of course, if you've been following my coverage of Starbucks, I've been emphasizing that this is a likely scenario .
I feel that Starbucks suffers from what I, and many economists, call "economies of scale," where its size leads to inefficiency. This happens when a business, or one of its sectors, grows so large that it becomes difficult to manage effectively, and costs begin to rise at a faster rate than sales growth.
We haven't discussed Starbucks stock for a few years, and over the past few years , not much has happened to the stock. Now we have to see if Starbucks will return to what it once was, a machine of cumulative growth.
Because when you look at the past five years, you will find a 20% decline, and constant fluctuations between ups and downs. However, the market capitalization is 108 billion, the price-to- earnings ratio is 54, and the dividend yield is 2.61%.
