Starbucks to pay its first dividend and expand buyback

Seattle Starbucks said it plans to pay a 10-cents-per-share cash dividend to investors. It will be paid on April 23.

The company says the dividend is its first paid in cash to investors.

The company also said its board approved a plan to buy back 15 million shares, which is on top of the 6.3 million shares it still has remaining to buy under a previous buyback program.

The news comes as Starbucks prepares to hold its annual shareholder meeting in Seattle.

“We are confident in the overall financial strength of our business and the strong cash flow it continues to generate,” said Troy Alstead, executive VP and CFO “Starbucks solid cash position and cash flow outlook enable the Company to invest in future profitable growth through stores, innovation and new platforms, while also returning cash to our shareholders through the initiation of a dividend and future share repurchases.”

Future dividends will need approval from company's board of directors. But executives say they hope future payouts will range from 35% to 40% of its net income.