One company with high ROIC over the last few years (apart from 2020) is $Starbucks(SBUX)$
Starbucks is a renowned global brand with more than 30,000 stores worldwide. Its addicting products combined with a well-respected brand has allowed its coffee to be sold at premium prices and generate recurring business from its base of loyal customers. Let's also not forget that Starbucks loyalty program encourages customers to load and spend via the Starbucks Card - Starbucks actually holds more cash than many banks in the US!
ROIC for Starbucks ranges from 35% to 47% in years 2015 to 2021, with the exception of 2020 when it dropped below 15% due to globallockdowns in response to the Covid-19 pandemic.
With the reopening of the economies and countries moving into an endemic era, restrictionsare being relaxed and people are starting to move away from stay-at-home. There are also less concerns on Covid-19 as the impact of the new variant are less severe compared to theearly days of pandemic. This may signal betterprospects for Starbucks, and this is corroborated by the improving profitability in 2021.
While Starbucks may not be as "sexy" and "exciting" compared to the other technology stocks, it is worth considering a value or defensivestocks that can withstand the pressures in a high inflation environment. Cost is expected to remain at elevated levels, and only companies that have the pricing power will be able to maintain their profitability. Starbucks' strong customer brand and excellent product offerings will likely be able to help it thrive in such a volatile environment.
Do you like Starbucks as well? Are you heading out to coffee at Starbucks with you loved ones this weekend? [Grin]
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[Chuckle]