Starbucks Yields 3 Times as Much as Wingstop. Which Is Better for Retirement?
One restaurant stock grows units at a blistering pace and has rewarded shareholders tenfold, while the other quietly hands out bigger checks year after year. For retirees who need dependable income, the flashier story may not be the safer bet.
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Starbucks (NASDAQ:SBUX | SBUX Price Prediction) or Wingstop (NASDAQ:WING): which restaurant dividend stock is the better fit for a retirement-focused investor right now? Both go ex-dividend on Nov 13, and the checks show the gap. Starbucks pays $0.63 per share on Nov 27. Wingstop pays $0.33 on Dec 4. That works out to a 2.35% yield for Starbucks and 0.74% for Wingstop.
The two business models sit far apart. Starbucks is a global coffee chain with 41,607 coffeehouses. Wingstop is a franchise-heavy wing chain with 3,331 restaurants, and it expects domestic same-store sales to fall 6.5% to 7% in 2026.
Income and Dividend Safety: Starbucks Pays More and Has Paid Longer
Starbucks just made its 16th consecutive annual increase. The quarterly payout has risen from $0.45 in 2021 to $0.63. Its free cash flow yield of 3.10% sits above the dividend yield, and fiscal 2026 operating cash flow reached $4.99B. Coverage is tighter than you might expect. The $2.52 forward annual dividend equals about 79% of the midpoint of fiscal 2027 EPS guidance of $3.15 to $3.25. Interest coverage stands at 6.95. Chief Financial Officer Catherine Smith said the priorities include “maintaining our investment-grade balance sheet, and supporting a competitive dividend.”
Wingstop has the larger buffer. Its $1.32 forward dividend is about 31% of trailing EPS of $4.27. Still, the yield is too small to fund retirement spending. Its history also includes one-time payouts such as $5.14 in 2020 and $4 in 2022, which retirees shouldn’t count on as regular income. CFO Alex Kaleida said the “first priority is investing behind our strategies.” Winner: Starbucks.
Growth Runway: Wingstop Has the Faster Engine
Wingstop expects 14.4% to 14.7% global unit growth this year. It has more than 2.3 thousand committed restaurants and a long-term goal of 10 thousand-plus locations. Its international count of 544 restaurants is up more than 27% from a year ago. New stores pay off fast for franchisees, with cash-on-cash returns near 60%. Over 10 years, the stock has returned 633.65%, compared with 141.11% for Starbucks. Wingstop is also the cheaper stock, at a forward P/E of 31 against 33 for Starbucks.
Starbucks expects EPS to grow close to 18% at the midpoint. However, it projects revenue to fall about 1%, and slightly more than $0.10 of that EPS comes from an extra 53rd week in the fiscal year. CEO Brian Niccol said, “Back to Starbucks is our growth plan,” but Wingstop is opening new stores much faster. Winner: Wingstop.
Risk and Volatility: Starbucks Is the Steadier Holding for Retirees
Wingstop has a beta of 1.757, compared with Starbucks’ 1.012. Over the past 52 weeks, it has traded between $95.82 and $300.78. It is down 30.59% year-to-date, even after a 40.98% rally over the past month. Third-quarter domestic same-store sales fell 5.4% on fewer transactions. Domestic average unit volume slid from $2.061M to $1.848M. Shareholders’ equity is negative at -$772.5M.
Starbucks has its own weak spots. Shareholders’ equity is negative at -$7.67B, and the stock trades at 48 times trailing earnings. Still, it is up 28.33% year to date. Global comparable sales rose 7.2%, the fifth consecutive quarter of comparable-sales growth. Winner: Starbucks.
Verdict: Starbucks for Retirement Income, Wingstop for Long-Term Growth
Starbucks wins for retirement-focused income investors. It pays more than three times Wingstop’s yield, has raised its dividend every year for 16 years, and is the steadier stock. It also plans about $1 billion of buybacks in fiscal 2027. Analysts are more conservative, with a $110.76 price target and 18 Hold ratings. That matters less to retired people who mainly want reliable, rising checks.
Wingstop fits a growth investor with a 10-year-plus horizon who can live with sharp price swings. Analysts are mostly bullish, with 19 Buy ratings and a $185.50 target. Watch whether fourth-quarter results show Wingstop’s domestic transaction declines easing. Until they do, Wingstop is a growth holding, and Starbucks is the income stock for retired people.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
