Financial Portfolio

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Financial Portfolio


December 24, 2012

Richard Smith

Team B Financial Portfolio

The main goal of an investor is to have the greatest possible return on investment while minimizing risk. By having a large selection of investments not only creates a diverse financial portfolio but allows for the biggest possible return. Team B has chosen a publicly traded bond Starbucks, and the stocks of The United Parcel Service, also known as UPS, The Home Depot, Inc., Wal-Mart Stores, Inc., Citigroup and Disney. The following information represents the results of our research of the above listed companies.

Starbucks Corporation Bonds

Starbucks Corporation ticker symbol on NASDAQ is SBUX. Starbucks as of September 2012 has a bond rating of A-. In August of 2007 Starbucks issued $550 million in bonds with a coupon rate of 6.25%, and a majority date of 08/15/2017 (Reuters, 2007). Originally in 2007 Starbuck’s intent was to issue only $500 million notes, but increased the amount $50 million. Reviewing Starbucks capital growth and world market revenue would indicate this was a profitable financial decision for Starbucks Corporation. Reviewing additional data from Morningstar Corporate Bond Index, indicates the average yield dropped to 2.58%, which matches its lowest level since the index inception in 1999 (Dave Saker, 2012). Financial analysis shows Starbucks will continue to grow internationally and domestically in the near future, maybe not at the same rate as recent years, but steadily in the market. Even if the growth estimates for consumer products international are over estimated, Starbucks still generates a tremendous amount of cash flow. Starbucks frequent cash flow is on average 10% a year, which is equivalent to $1 billion in cash flow (Dave Saker, 2012).

United Parcel Service of America Financial Status

The United Parcel Service of America, Inc. is also known as the ticker symbol UPS on New York Stock Exchange (NYSE). This corporation has been in...