Better Stock to Buy Right Now: Dutch Bros vs. Starbucks

<p>Approximately 66% of Americans drink coffee daily. Of that percentage, more than 80% drink two or more cups. Coffee is a big business, to say the least. Over the past couple of years, the U.S. <a href="https://www.fool.com/investing/stock-market/market-sectors/consumer-staples/beverage-stocks/coffee-stocks/?utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=440074aa-56f4-4da9-b0be-496613046128">coffee market</a> exceeded $100 billion.</p>
<p>The coffee industry is fiercely competitive as it clamors for our love of caffeine. Starbucks (NASDAQ: SBUX) is a global franchise working to return to its status as a beloved "third place" in society -- a distinct social space, separate from home and work. Dutch Bros (NYSE: BROS) is a fast-growing drive-thru chain aggressively expanding its market share.</p>
<p>Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. <a href="https://api.fool.com/infotron/infotrack/click?apikey=35527423-a535-4519-a07f-20014582e03e&amp;impression=7b78c221-6cfe-4972-9534-f3936eda0cb6&amp;url=https%3A%2F%2Fwww.fool.com%2Fmms%2Fmark%2Fa-sa-ai-boom-nvidias%3Faid%3D10891%26source%3Disaediica0000069%26ftm_cam%3Dsa-ai-boom%26ftm_veh%3Dtop_incontent_pitch_feed_yahoo%26ftm_pit%3D18914&amp;utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=440074aa-56f4-4da9-b0be-496613046128">Continue »</a></p>
<p>Which stock is the better buy right now?</p>
<h2>Dutch Bros is expanding its footprint and treats</h2>
<p>Dutch Bros is a Pacific Northwest-based drive-thru coffee company that is rapidly growing. In fiscal year 2025, Dutch Bros increased its revenue 27.9% year over year. The company opened 154 new shops across 22 states. Lastly, adjusted earnings before interest, taxes, depreciation, and amortization (<a href="https://www.fool.com/terms/e/ebitda/?utm_source=yahoo-host-full&amp;utm_medium=feed&amp;utm_campaign=article&amp;referring_guid=440074aa-56f4-4da9-b0be-496613046128">EBITDA</a>) increased 31.4% compared to the previous year.</p>
<p>Dutch Bros is now developing a hot food menu to attract and retain even more customers. This addition will allow the chain to directly compete with breakfast and coffee staples such as Starbucks and Dunkin'.</p>
<p>The stock hasn't fared well over the past 12 months, though, declining nearly 15%. However, Goldman Sachs just upgraded Dutch Bros from neutral to buy.</p>
<h2>Starbucks misses you</h2>
<p>Last year was not easy for Starbucks. For the 2025 fiscal year, global comparable-store sales declined by 1%. Consolidated net revenues increased 3%, but operating margin fell precipitously amid the closing of more than 400 stores in North America.</p>
<p>Starbucks CEO Brian Niccol wants his "Back to Starbucks" restructuring plan to reestablish the brand as a pleasant coffee shop where you are welcome to sit and stay. Through menu simplification and in-store remodels, Starbucks has been busy implementing this strategy since late 2024.</p>
<p>The strategy's anticipated effectiveness is reflected in the company's 2026 guidance. Starbucks expects comparable-store sales growth of 3% or more, along with a slight improvement in margins.</p>
<p>Starbucks is also opening between 600 and 650 new coffeehouses globally this year. The stock rose 19% thus far in 2026. Its forward P/E ratio of 43 means Starbucks could be slightly overvalued.</p>