Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people achieve financial freedom through our website, podcasts and books, newspaper column, radio broadcast and premium investment services

Starbucks built its coffee empire by convincing the general public that drinking their favorite caffeine beverage should be a premium experience worth paying for

Netflix saw the popularity of the Internet as an opportunity to bring high quality media content to viewers at an affordable monthly price, when and how they want it

They’re both great companies, but investors need to weigh a few important considerations before deciding which stock to buy

Before the coronavirus pandemic significantly changed the daily commute and coffee consumption behavior of workers, Starbucks had steadily increased its sales over the past few years, from fiscal 2016 to fiscal 2019, total sales rose 75% average annual growth rate, while net income rose 8% added 5% clip

Given the stability of the business, Starbucks stock has risen only 59% over the past five years, which actually lags behind the broader S&P 500.However, what Starbucks lacks in sales and earnings growth it makes up for in management’s capital allocation policy wett In fiscal 2019 alone, Starbucks repurchased more than $ 10 billion of its shares, boosting earnings per share, which investors should appreciate

The company was hurt by home orders executed earlier this year When the American company moved to a work-from-home model, office workers stopped going to coffee shops on their way to work, and comparable store sales decreased Fiscal 2020 down 14% year over year Starbucks has seen a rebound in those metrics, however, with comps only declining 3% in the fourth quarter in China

What didn’t seem to be slowing is Starbucks’ propensity to open more stores in the fourth quarter of fiscal year alone, the company added 480 new locations, bringing the total number of stores worldwide to 32660 increased main competitor in China, Luckin Coffee, admitted it falsified financial reports to increase reported sales in 2019 and put Starbucks in the best position to gain market share in this lucrative business

As a leader in the battle for our attention, Netflix has made investors rich over the years, its inventory has grown 19x over the past decade, driven by impressive subscriber growth, that of 20 million Has increased to 20 million as of December 31, 2010 to 195 million today

With most of the world spending more time at home, Netflix benefited hugely from a coronavirus-related surge in 2020 The company added almost as many members in the first six months of this year as it did in all of 2019

That remarkable growth, however, has sparked stiff competition, particularly from entertainment giant Walt Disney, whose Disney streaming service exceeded 73 million paying subscribers in the last quarter, which is still a long way from Netflix, but a threat looms. p>

This industry is not a winning market, however, with many consumers paying for multiple services to meet their viewing needs, and Netflix is ​​aggressively investing in improving its offering to attract viewers as it needs to scale up globally as soon as possible, the growth has been in slowed down in the U.S.This leads to Netflix’s intense focus on overseas markets

I’ve made arguments about why both companies warrant an investment, and I’m an avid customer of both companies, but one stock has the advantage: Netflix, even with a market cap of $ 215 billion (almost double that of Starbucks) I firmly believe that Netflix still has plenty of room to run

As a purely digital offering, the company can theoretically serve anyone in the world with a suitable Internet connection. The number of broadband Internet subscriptions worldwide is increasing from year to year and supports the endeavors of Netflix

Market data from FactSet and Web Financial Group


World news – USA – Buy better: Starbucks vs. Netflix | The colorful fool