The ‘No-Brainer’ Stock For Any Portfolio
Choosing the perfect stock isn’t easy.
The trick is finding one that can offer you both safety and growth.
Many people would tell you this is impossible — that to see true growth you have to find small, unproven companies… and that to minimize risk, you have to sacrifice gains.
But I went on a search to find a powerhouse stock that proves otherwise… and I think I’ve found a prime example. It’s been one of the highest-performing stocks in the market over the past five years. And, it’s also one of the least risky.
#-ad_banner-#
I’m talking about Starbucks (Nasdaq: SBUX).
As you might know, the specialty coffee retailer dominates its market in terms of sheer size — serving up nearly 60 million consumers every week. But that alone doesn’t make it a great investment.
What truly makes this company so special is that it carries a unique trait that allows it to lower its market risk… and open the door for big gains.
Starbucks possesses what we call an “Irreplaceable Asset.”
What is an Irreplaceable Asset? Simply put, it’s something a company owns that no one else can easily buy or create.
Whether it’s an airport or railway, hydroelectric dam or a system of oil and gas pipelines, none of these assets can be easily replicated by competitors. In fact, rival companies could spend $1 billion and still not have the kind of power that companies with an Irreplaceable Asset have.
But Starbucks’ Irreplaceable Asset goes far beyond just big, physical facilities. No competitor can simply build what this specialty-coffee giant owns.
I’m talking about its branding. Starbucks’ powerful brand image is unrivaled by any of its competitors.
Recognition of the Starbucks brand is a driving force behind the company’s massive success and continual growth.
Just think about the company’s logo. I’m betting you can already picture it in your head — the flowing mermaid in the little green circle. It’s a symbol that lets everyone know you take pride in the coffee you’re drinking.
My colleague Dave Forest put it best in a recent issue of his premium newsletter, Top 10 Stocks:
“When you see [the Starbucks logo] you know exactly which company I’m talking about. What this little symbol represents cannot be duplicated. Just ask the legions of java-craving folks around the world who will walk five extra blocks in order to get a grande latte from Starbucks.“
Dave is so convinced by Starbucks’ branding strength that he’s held it in his Top 10 Stocks portfolio for over two years now. Since then, it’s given him 51% returns.
And take a look at how the company’s fared against the S&P 500 over the last five years.
Going back to 2009, while the S&P has grown a respectable 100%, Starbucks has crushed its performance, delivering a 463% return to investors.
Of course, just because a stock’s share price has grown in the past doesn’t mean it will continue growing in the future. But Starbucks’ outlook is very bright — and its Irreplaceable Asset should continue to help the company grow for decades to come.
The company currently operates in more than 20,000 retail outlets around the world, with plans to add another 1,500 stores this year. And just 40% of its stores are located in foreign markets — including 1,100 in China, with 400 more planned by the end of 2015. That leaves the door open for even more global expansion and hundreds of millions of new Starbucks customers.
Starbucks is also continuing to add new products to keep its customer base growing.
The company has tested selling beer and wine in 40 stores nationwide to gain exposure in the $400 billion alcohol market. The results have been successful, with Chief Operating Officer, Troy Alstead, saying that the stores offering alcohol have seen “a meaningful increase in sales [during evening hours].”
But that’s not the only new beverage Starbucks plans to offer customers.
The company also began making a push into the $415 billion carbonated beverage market by now offering consumers handcrafted sodas — which should help fill stores in the afternoons after customers have had their morning coffee-fix.
And considering that the average Starbucks store averages about $800,000 in sales per year, selling just 36 handmade sodas per day at each location — for just $3 a piece — could generate a 5% increase in the company’s total annual sales.
In the end, Starbucks’ Irreplaceable Asset — its strong brand image — will leave other companies hard-pressed to slow down its continued success going forward.
And with its continuous innovation, increased global expansion and an ability to offer perceived quality unrivaled by competitors, Starbucks embodies a strong, stable company that could offer you decades of strong returns.
It really is a “no-brainer” stock that offers safety and growth for any portfolio.
And everyone should consider owning it.
Good investing,
Josh Sparrow
Dividend Opportunities
P.S. — It’s no surprise that our “10 Best Stocks to Hold Forever” report lists several other companies that own Irreplaceable Assets. These 10 world-dominating companies are offering shareholders dividend yields twice as high as the S&P 500, and all but two of them beat the market during the 2008-2009 crash. And since March 2009, while the S&P gained 200%, these top 10 stocks have gained more than 291%. They’re so solid, we recommend buying them and holding on to them forever. Visit this link to get all the details now.