Starbucks Purchases First Coffee Farm; Will Be Used as Research Center (SBUX)

On Tuesday it was announced that the world’s largest coffee chain, Starbucks Corporation (SBUX), has bought its first coffee farm in order to research a devastating fungus that has been wiping out coffee crops through Mexico and Central America. The farm will also harvest its own beans.

The Seattle-based coffee retailer purchased an active coffee farm on roughly 600 acres of land in Costa Rica. The financial terms of the deal were not released. The company will convert the farm to a global research and development center for coffee agriculture.

A main focus of the new farm/research center will be to study the devastating roya fungus, known as leaf rust, which kills coffee tree leaves by draining them of nutrients and lowering bean yields. The fungus has plagued Central America and beyond, lowering coffee bean yields from Mexico to Peru. This drains the Central American economies, which heavily rely on coffee production, and boosts up coffee prices around the world.

According to a Starbucks spokeswoman, the now Starbucks-owned active arabica farm will continue to harvest beans that will be roasted and sold by the company.

Starbucks shares were up 42 cents, or +0.73%, during Wednesday morning trading. The stock is up +6.44% over the past year.

The Bottom Line
Shares of Starbucks (SBUX) have a dividend yield of 1.47% based on Wednesday’s intraday trading price of $57.25 and the company’s annualized dividend payout of 84 cents per share.

Starbucks Corporation (SBUX) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

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