3 Reasons Starbucks Stock Deserves the Premium

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There's no way around it; Starbucks' stock is expensive. 

Priced at 31 times last year's earnings, and sitting close to an all-time high, the company's shares are valued like one of its "indulgence" drinks right now.

Caramel Frappuccino, anyone?

But there are good reasons underpinning that premium valuation. In the video below, Fool contributor Demitrios Kalogeropoulos discusses three of Starbucks' biggest avenues for growth over the next few years. Demitrios argues that success in these ventures, which include loyalty cards, store expansion in the U.S., and a new food menu, could make today's share price seem completely fair in retrospect.

The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The article 3 Reasons Starbucks Stock Deserves the Premium originally appeared on Fool.com.

Fool contributor Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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