Starbucks Corporation (NASDAQ:SBUX), the world’s largest coffee company, is certainly a darling of Wall Street. At $80.94 a share, its stock is trading intimately close to its 52 week high of $82.50 a share, having gained from lows of $48.95 a share twelve months ago. To add icing to the cake, analysts have pegged a 1 year price target estimate of $89.12, signaling that there is still room for upward movement on the stock market.

Compelling Fundamentals Tell Only Half The Story

Starbucks’ bullish narrative is supported by its compelling fundamentals. In the fourth quarter of its fiscal year which ended in October, the coffee maker posted a 37 percent year-on-year uptick in earnings per share and beat estimates of $0.60 EPS to record actual EPS of $0.61. The bigwig’s revenue also gained 12.8 percent year-on-year. In line with this stellar performance, Starbucks stepped up its quarterly dividend to $0.26, signaling a 24 percent quarterly increase. This incremental increase in the Q4 dividend culminated into an annual yield of 1.28 percent. Ostensibly, this yield doesn’t pass by as a great bargain. However after considering that Starbucks started issuing dividends in 2010, the dividend yield is quite impressive. Moreover, dividend payments have been on a steady increase from 2010 through to 2013, having increased from $0.36 in 2010, $0.56 in 2011, $0.72 in 2012 and $0.86 in 2013.

Starbucks’ commitment to creating shareholder value, coupled with great underlying fundamentals, provides the perfect backdrop for an interesting growth narrative, and more importantly, strengthens the buy case. Surprisingly, there is an even greater reason why you should buy Starbucks stock for the long-term.

Strong Brand Promises Great Growth Going Forward

Businesses are the same; it is the brand that makes them different. This is conventional business wisdom. In line with this, Starbucks is going to great lengths to build the right brand; a brand that signals its ability to constantly deliver beyond its promise.

From a marketing standpoint, a great brand is not about everyone knowing you, but about everyone liking you. It is about what “they” say you are and not what you try to say you are through advertisement campaigns.

Starbucks recently announced that it would hire at least 10,000 veterans and military spouses over the next half decade. The world’s largest coffee maker will establish an internal infrastructure to pair the transferable skills of veterans and military spouses with specific talent across the company. This move comes amid a continued push from various pressure groups to avail work for veterans and military spouses, who for a long time have found it hard to get a job. Starbucks, which rolled out wireless charging in its stores, also announced that it would open community stores in San Antonio, Texas and Lakewood, Washington.

Earlier in the year, Starbucks came out to publicly support gay marriages. In a bold move during the company’s annual meeting, CEO Howard Schultz responded to a shareholder’s opposition to the company’s support for gay marriages by saying that it was a free country and that the shareholder in question, later identified as Tom Strobar, could sell his shares.

Takeaway

By sharing in the community’s problems, Starbucks not only shows that it cares, but that it is also part of the community and not just a business. This strategy continues to grow the brand; which in effect hedges against volatility in earnings and fuels growth on the stock market. Starbucks looks like it could be a good long-term buy.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.