Regardless of geographic location, coffee has always been a morning staple to jumpstart the day ahead. While several brands exist in the market, in the United States, the coffee industry is primarily dominated by two names: Starbucks (NASDAQ:SBUX) and Dunkin’ Donuts (NASDAQ:DNKN). Multiple factors come into play when it comes to brand selection and loyalty, but in terms of investment security, whose cup of coffee is the better option?

 

The bigger of the two giants, Starbucks Corporation (NASDAQ:SBUX) is an established roaster, marketer, and retailer of specialty coffee in 62 countries. Coffee, handcrafted coffee, tea and other beverages, and an array of food varieties may be purchased from their cafes. They also market their trademark products via licensed stores, grocery stores, and national foodservice accounts.

 

Apart from their largest Starbucks (NASDAQ:SBUX) name, the company has a horizontally-expanded market reach through brands like Teavana, Tazo, Seattle’s Best Coffee, Starbucks VIA, Starbucks Refreshers, Evolution Fresh, La Boulange, and Verismo. The company has a market cap of $58.56 billion.

 

Dunkin’ Brands Group Inc. (NASDAQ:DNKN) franchises quick service restaurants under their Dunkin’ Donuts and Baskin-Robbins brands. They serve hot and cold coffee, baked goods, and ice cream in 17,400 stores in 55 countries. The company operates in four segments: Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-Robbins U.S., and Baskin-Robbins International.

 

There were 10,479 Dunkin’ Donuts points of distribution as of December 29, 2012 – 7,306 were in the U.S. and 3,173 were international; 6,980 Baskin-Robbins points of distribution comprised of 2,463 U.S. stores and 4,517 international ones. Dunkin’ Donuts (NASDAQ:DNKN) has a market cap of $4.82 billion.

Although Dunkin’ Donuts (NASDAQ:DNKN) reigns supreme in the East Coast, especially in New England, Starbucks (NASDAQ:SBUX) owns a big chunk of the coffee market share, almost like a monopoly (Huffington Post), through patronage of clients in the greater metropolitan areas.

 

Starbucks (NASDAQ:SBUX) has had licensed and company-owned stores since 1992 when it went public. Just going by the existing volume of distribution points, it cannot be denied that the mermaid brand has the upper-hand. While Dunkin’ Donuts (NASDAQ:DNKN) just recently went public on 2011, this greenhorn is determined to take seat on the reigning coffee king’s throne.

 

A major advantage of Dunkin’ Donuts (NASDAQ:DNKN) is their products’ affordability and marketability. Going by the price alone, the company is more favored by younger demographics. Although not as healthy as those of Starbucks (NASDAQ:SBUX)’s, their pastries are well-loved by patrons as well.

 

In terms of market capital, Starbucks (NASDAQ:SBUX) is the larger company. Although smaller firms have more sustainability tendencies, the future of Dunkin’ Donuts (NASDAQ:DNKN) still greatly relies on the company’s goals and strategies.

 

Starbucks (NASDAQ:SBUX) surpassed the consensus estimate of $0.66/share (EPS) last quarter by +1.52% posting at $0.67/share. Several analysts revised their EPS estimates for the company’s current year (09/2014): six were positive, and two were negative. Although only two were negative, the consensus estimate dropped from $0.75/share to $0.74/share 30 days ago. Currently, Starbucks (NASDAQ:SBUX) has 0.00% EPS surprise.

 

Dunkin’ Donuts (NASDAQ:DNKN)’s EPS of $0.47/share last quarter was at par with the consensus estimate of $0.47/share. Analysts also revised their EPS estimates for the company – 14 of which were negative and plunged the consensus estimate from $0.50/share to $0.48/share 60 days ago. Like Starbucks (NASDAQ:SBUX), Dunkin’ Donuts (NASDAQ:DNKN) has an EPS surprise rate of 0.00%.

While investment decisions still depend greatly on the person, it is noteworthy to consider the fact that stocks from both companies maintain a Zacks Rank #3. This means that better entry points for both stocks in the near future is possible. Long-term investments, however, need a more thorough investigation for security.

 

Checking a company’s dividends proves to be of great help as well, along with possible product and market expansions. While Starbucks (NASDAQ:SBUX) has been a disappointment to their investors this year, possibility of boosting stock prices remain positive as the reigning coffee market king never falters in coming up with new food, products, express stores, and rewards and loyalty programs to keep their stock performance healthy.

 

While Starbucks (NASDAQ:SBUX) is recognized as a luxury coffee name overseas, Dunkin’ Donuts (NASDAQ:DNKN)’s Baskin Robbins brand is hardly making its presence in the international market.

 

Starbucks (NASDAQ:SBUX) is a definite winner if we are to consider both company’s price earnings to growth (PEG) ratio as well: Dunkin’ Starbucks (NASDAQ:SBUX) stocks cost a little less than those of Dunkin’ Donuts (NASDAQ:DNKN)’s, but based on the reigning king’s PEG ratio of 1.77 (Dunkin’ Donuts (NASDAQ:DNKN) has 1.62), a bigger return is expected from one’s $1 – under current valuation bases, at least.

Get Free Updates and Stock Alerts!

*We only send one email per week