Sure, you might feel like coffee saves your life on Monday mornings, but new studies show that it might actually be true over the longer term.
Not necessarily in the short term, but long term effects include prevention of dementia, decreased risk of diabetes, and association with all-cause mortality.
A recent study supports coffee’s inverse association with total and cause-specific mortality. Whether it is causal or associative couldn’t be determined, and there was a difficulty in understanding the raw data presented. It was found that coffee drinkers were more likely to die, but they were also more likely to smoke. After accounting for the variable, it was found that coffee was associated with decreased all-cause mortality. Take note: The test subjects showed that the effect was dependent on the consumption of around five cups per day. (As a Seattleite, I love coffee and drink a lot of it, but even 5 cups is quite a bit per day.)
The study doesn’t do much in the face of historical data, though. There are countless studies claiming both positive and negative effects of coffee consumption, including heart disease, hypertension, and stained teeth, but its benefits are still easily supported.
Business Section: Investing Ideas
If coffee is considered healthier than it was before, what does that mean for coffee companies? It really depends on how strongly the alleged benefits are advertised. I’ve already seen Seattle’s local coffee shops advertising the health benefits of their organic coffee beans, so the larger companies only have to utilize similar marketing campaigns to reap the rewards.
That brings up the argument of which coffee beans are healthier. The claims vary by producer and seller, but my experience tells me that the health benefits of organically grown beans are advertised much more than the alternatives.
So, who has organic beans? Well, smaller and privately owned coffee shops do in the Seattle area, and Starbucks (SBUX) and Peet’s (PEET) have certain organic blends.
So how can this fit into your portfolio?
Below is a list of a few of the big names in the coffee scene. How do you think they will leverage the news?
Use this list as a starting-off point for your own analysis. List sorted by market cap.
Compare changes in average analyst ratings for the companies mentioned below:
1. McDonald’s Corp. (MCD, Earnings, Analysts, Financials): Operates as a foodservice retailer worldwide. Market cap at $89.47B, most recent closing price at $88.94.
2. Starbucks Corporation (SBUX, Earnings, Analysts, Financials): Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Market cap at $38.24B, most recent closing price at $50.60.
3. Dunkin’ Brands Group, Inc. (DNKN, Earnings, Analysts, Financials): Operates, and franchises quick service restaurants worldwide. Market cap at $3.83B, most recent closing price at $31.81.
4. Green Mountain Coffee Roasters Inc. (GMCR, Earnings, Analysts, Financials): Engages in the specialty coffee and coffee maker business. Market cap at $2.78B, most recent closing price at $17.49.
5. Peet’s Coffee & Tea, Inc. (PEET, Earnings, Analysts, Financials): Operates as a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea in the United States. Market cap at $993.75M, most recent closing price at $73.05.
Written by Danny Guttridge, avid coffee drinker.
Use Kapitall’s Tools: Looking for ways to analyze this list?
Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall’s tab navigation to browse through the data…
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- McDonald’s Corp. (MCD, Chart, Download SEC Filings)
- Starbucks Corporation (SBUX, Chart, Download SEC Filings)
- Dunkin’ Brands Group, Inc. (DNKN, Chart, Download SEC Filings)
- Green Mountain Coffee Roasters Inc. (GMCR, Chart, Download SEC Filings)
- Peet’s Coffee & Tea, Inc. (PEET, Chart, Download SEC Filings)
New to Kapitall?
1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter
ABOUT KAPITALL WIRE
Kapitall Wire, which is not a broker/dealer, offers free cutting edge investing ideas, lively commentary and timely analysis of companies enhanced by interactive tools. And the Investing 101 section breaks complex concepts down to their basics, offering education to novices that doubles as a refresher course for more seasoned investors.
Kapitall Wire is a division of Kapitall Inc. Securities products and services are offered by Kapitall Generation, LLC, member FINRA/SIPC . Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.
