Starbucks Corporation (SBUX), Green Mountain Coffee Roasters Inc. (GMCR): Wake up, Grab Some Coffee, and Invest in It

Human beings drink a whole lot of coffee. In the United States alone, consumption is around 4.2kg of the bean per person, per year. That means big business for companies like Starbucks Corporation (NASDAQ:SBUX) and Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) which get this commodity into the hands of consumers.

Not to be outdone by the United States, Canada actually consumes even more coffee on a per capita basis. An incredible 6.5kg per person is what Canadians put back on a yearly basis. They have Starbucks Corporation (NASDAQ:SBUX) up there, but by far the biggest coffee seller north of the border is Tim Hortons Inc. (USA) (NYSE:THI).

The Keurig

One of the biggest appeals of Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is their Keurig machine. The little coffee maker that sits on kitchen counter tops takes a single serve coffee pack and produces just the right amount of coffee from it.

These machines took off like wildfire in 2010, and the company has capitalized on being the only seller of the K-Cups that this machine takes.

Sales encompassing the entire Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) business were just $490 million in 2008. They have since grown to $3.86 billion as of the close of 2012. Net income has been following along the same path growing from a 2008 value of $21.67 million all the way up to $362 million in 2012.

Analysts have it rated as a ‘buy’. Eight of the fourteen analysts believe it to be a ‘strong buy’, and the rest are spread among the other categories. One analyst is going against the grain giving the stock a ‘strong sell’ rating.

Looking at estimated growth for Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) from those above analysts, we can see that they expect five-year growth to be about 20%. In 2013 alone, analysts have settled on a median growth number right around 31%. For a little bit of comparison, the S&P 500 as a whole has a five-year growth rate of 9.9%, so Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is right about double.

The Behemoth

Starbucks Corporation (NASDAQ:SBUX) is the behemoth of the coffee industry. The company sells in excess of $13 billion of coffee every year to consumers across the United States, and around the world.

I’m sure that a majority of people out there would consider Starbucks Corporation (NASDAQ:SBUX) a much more solid brand than Green Mountain, simply because of the company’s worldwide reach. Well, I think I’d have to agree.

Starbucks Corporation (NASDAQ:SBUX) brings a lot of growth to the table. Revenues have been growing consistently over the last five years at a rate of around 6% per year. That’s pretty steady.