Is Starbucks Corporation (SBUX) Invincible?

That said, those looking for safety should consider McDonald’s Corporation (NYSE:MCD) over Starbucks Corporation (NASDAQ:SBUX). For example, McDonald’s Corporation (NYSE:MCD) dropped approximately 15% during the financial crisis of 2008 and 2009. McDonald’s Corporation (NYSE:MCD) also yields 3.10%, whereas Starbucks yields just 1.30%.

Furthermore, even though caffeine is addictive, it can be found in other places for cheaper prices if necessary. For those of you thinking about Dunkin Brands Group Inc (NASDAQ:DNKN) as a quality defensive play, this isn’t likely to be a good option. It’s a great company with a lot of growth potential as it penetrates the Western United States and emerging markets, and it currently yields 1.80%. But the borrowing it’s done to fuel its growth means Dunkin Brands Group Inc (NASDAQ:DNKN) also sports a debt-to-equity ratio of 5.32.

As far as valuation for Starbucks Corporation (NASDAQ:SBUX) is concerned, Dunkin Brands Group Inc (NASDAQ:DNKN)’s far less of a threat than the overall macroeconomic environment. However, if the U.S. economy can at least show a pulse, then Starbucks should be able to grow enough to meet or exceed expectations.

The bottom line

Starbucks Corporation (NASDAQ:SBUX) is a well-oiled machine. It’s extremely well-run, and it’s going to grow in a traditional sense as well as with its drive-thru stores and in-home coffee. Its strong balance sheet also makes acquisitions more affordable, should the company wish to buy out any additional rivals and further increase its market share.

Despite potential headwinds, Starbucks should remain a good investment. Just keep a sharp eye out for interest rate changes as well as changes in Federal Reserve policy. If interest rates increase too fast, or if Federal Reserve Chairman Ben Bernake begins to unwind monetary stimulus, then investors are likely to flee high-valuation stocks like Starbucks Corporation (NASDAQ:SBUX).

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends McDonald’s and Starbucks. The Motley Fool owns shares of McDonald’s Corporation (NYSE:MCD) and Starbucks Corporation (NASDAQ:SBUX).

The article Is Starbucks Invincible? originally appeared on Fool.com.

Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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