Coffee reigns as America’s most popular beverage, with 56% buying coffee away from home 1-3 times per week. If you’re looking to cash in on this trend, consider buying Dutch Bros stock, a growing coffee chain serving vibrant coffee drinks from drive-thru locations across the country.
This guide will analyze the most important facts about the coffee company, as well as explain how to invest in BROS. In addition, we will go through the risks involved in trading the stock and provide you with an overview of the best brokers to use.
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What is Dutch Bros?
Dutch Bros and its franchise partners operate roughly 500 stores in 12 states and employ 16,500 people. In 2017, Dutch Bros stopped franchising, now only opening company-owned stores.
Notably, in 2022, Dutch Bros. Coffee was the third-largest coffee shop chain in the United States, with over $1 billion in revenue.
In late November 2022, to further scale and grow the business, Dutch Bros hired former Starbucks (NASDAQ: SBUX) executive Christine Barone to serve as the company’s president. In fact, Barone’s expertise in both the coffee and service industries and her hands-on leadership style are predicted to be critical factors in helping Dutch Bros reach its goal of 4,000 stores within 10 to 15 years.
Dutch Bros IPO: when did Dutch Bros go public?
Dutch Bros became a publicly-traded company through an initial public offering (IPO) in September 2021, listing 21 million shares at an initial price of $23 each, raising $484 million.
After the IPO, Travis Boersma retained around 74% of shareholder voting power. TSG, a private equity firm that bought 22.2% of Dutch Bros in 2018 for an undisclosed amount, is the company’s minority stakeholder.
Dutch Bros trades on the NYSE exchange under the ticker symbol BROS. You can purchase BROS stock through multiple brokers, which we will briefly explore later in this guide.
Step-by-step process on how to buy Dutch Bros stock
BROS is a publicly traded company, meaning you can buy BROS stock through a broker. The steps involved in purchasing BROS shares are outlined in the following section in detail.
Step 1: Choose a broker
To buy BROS stock online, you’ll need a brokerage account. Several platforms are available, but the right one will depend on your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products such as options). When evaluating brokers, consider the following features:
- Fees: Brokerage fees is a type of fee collected by brokers to execute your transactions or provide specialized services. However, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETFs) trading;
- Security: Pick a reliable broker by ensuring it is fully licensed by state regulatory authorities as well as FINRA and registered with the Securities and Exchange Commission (SEC);
- Trading tools: Active traders may want more out of their brokerage accounts. Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s usually a good idea to look for an easy-to-use platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: You should search for a platform that gives you access to solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares allow investors to buy stock or ETFs by the dollar amount instead of the number of shares; particularly helpful for investors who don’t have limited capital but want to build a diversified portfolio or are looking to set up a dollar-cost averaging strategy.
Also, traders can opt for online, full-service brokers or discount brokers, as well as robo-advisors.
Dutch Bros stock: where to buy?
Access to the financial markets is easy and inexpensive, thanks to various online brokers. However, choosing the right broker optimized for your needs (investing goals, educational tools, trading style) is paramount for a successful trading experience.
To securely invest in Dutch Bros and buy BROS stock, consider these brokers:
1. eToro
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
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- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
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Step 2: Fund your account
Once you have selected a broker, the next step is funding your trading account. Remember, it can sometimes take up to three days for the funds to be deposited.
Step 3: Research the company
When investing your money in the market, doing your research is crucial. If you want to buy BROS stock, keep an eye out for the current Dutch Bros stock price, as well as past price data, overall valuation, and company announcements regarding new launches or relevant news stories.
The best place to start your research on a stock is to go through its public filings with the SEC. Conveniently, Dutch Bros’ quarterly earning reports (form 10-Q), SEC filings, business presentations, and recent press releases can be accessed directly on its website from its investor relations section.
Step 4: Decide how much you want to invest
After you’ve done your research and determined that Dutch Bros stock is the right choice for you, you’ll need to decide how much you want to invest.
The amount of money you invest ultimately depends on the price and number of shares you want to buy. If the share prices of stocks you’re interested in are financially out of reach, you can also explore fractional shares. Fractional shares allow you to purchase a portion of a stock instead of the full share.
Because investing can have unpredictable returns, it’s crucial only to invest what you can afford to lose and to be mindful of your risk appetite.
Step 5: Place your order and buy Dutch Bros stock
Once you decide on the number of shares or the dollar amount you’d like to purchase, you can place your order. If you’re working with an advisor, tell them you’d like to buy Dutch Bros stock and how much you can invest, and they’ll do it for you. If you’re using a brokerage account, simply log in and enter the ticker symbol BROS in the search bar.
There are a few different execution options to choose from, including:
- Market order: A market order is an order to buy the stock at the current market price that is generally executed immediately (subject to availability);
- Limit order: A limit order is processed once the stock reaches your specified price. For example, imagine you want to buy Dutch Bros stock at $35 or lower. You would then set the limit price at $35, and the order will only execute when the stock reaches the set price or lower;
- Options contract: Options speculation allows for leveraged positions in a security at a fraction of the cost of the underlying asset. A call option allows the trader to profit if the price of the stock increases, and a put option enables them to profit if the stock price declines. Derivative products can only be traded on a margin account, which typically has higher minimum balance requirements than standard brokerage accounts.
Step 6: Monitor your investment
While maintaining a “set it and forget it” strategy may work for investors with a diversified ETF portfolio, single stocks require more frequent check-ins. For companies like Dutch Bros, investors should pay attention to company health indicators such as revenue and profitability, relevant company announcements, as well as global market conditions that affect business.
You may also want to track competitors’ performance in the food service and restaurant industry, such as Starbucks and Dunkin’ Donuts (NASDAQ: DNKN).
Then, depending on your financial goals, use what you learn about Dutch Bros and the industry as a whole to reevaluate whether it’s best to hold onto the stock or sell it.
Should I buy Dutch Bros stock?
Besides looking at Dutch Bros fundamentals, you can use technical analysis to evaluate the company and identify trading opportunities in price trends and patterns seen on charts.
This gauge displays a real-time technical analysis overview for your specified timeframe. It can be a valuable technical analysis tool for many traders by simplifying trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in stocks
Mistakes are expected when investing in stocks but can be avoided if you recognize them. For an in-depth guide on investing mistakes, we have compiled a list of 17 common mistakes and tips for preventing them. But, for now, let’s list some of the most typical ones:
- Not performing your due diligence on the stock;
- Having unclear financial goals;
- Attempting to time the market;
- Failing to diversify;
- Letting your emotions rule the investment decision-making process.
How to sell Dutch Bros stock?
You can sell Dutch Bros stock if you see the company performing differently than you’d expected or if you’ve reached the financial goal you set when you first invested in the company.
If you’re working with an advisor, they can create a sale order for you. However, if you have your own broker account, you can simply log on, navigate to the stock’s detail page, input the number of shares or dollar amount you want to offload, and tap sell.
Pros and cons of buying Dutch Bros stock
Although Dutch Bros still has a lot of progress to make before it can take on coffee giants like Starbucks and Dunkin’, the company seems poised for success in the future.
So, now that we’re familiar with Dutch Bros and how to buy its stock, let’s explore both the pros and cons of investing in it.
Pros
- Low-capital cost for setting up new stores: Dutch Bros locations are significantly smaller than the average coffee shop, helpful as it cuts down on expenditure– they don’t have to spend as much money leasing out large spaces in the middle of high-traffic areas like Starbucks or Dunkin’ Donuts;
- Pandemic-friendly set-up: As a drive-thru, Dutch Bros can benefit from a pandemic/post-pandemic customer that favors the socially-distant, limited-contact pickup phenomenon;
- Reaching the younger generation: Dutch Bros has successfully appealed to a younger audience with potentially more disposable income, which can be spent on premium-priced beverages;
- Steady growth: Dutch Brothers has a significant opportunity for growth in the coming years. They plan to have 4,000 stores across the U.S. over the next 10-15 years, putting them on par with Starbucks and Dunkin’ Donuts, which boast 15,000 and 9,000 locations in the U.S., respectively;
- Noteworthy leadership: A former Starbucks executive is now the president of Dutch Bros. Her leadership is expected to help grow and scale the business even further.
Cons
- Tough competition: Although Dutch Bros seems to be quite successful in the country’s west, it still needs to compete with big players in the industry. Starbucks and Dunkin’ are intimidating competitors with years of national recognition and global expansion. So, until Dutch Bros can establish a foothold in the east of the U.S., it will not be able to compete fully with the more prominent nationwide players;
- Declining stock price: After a stellar IPO, Dutch Bros has seen its stock price hammered, shedding over half of its value from its all-time high of $76.24 in October 2021;
- Adverse macroeconomic conditions: Due to inflation, customers are more conscientious than ever about spending their money, particularly on non-necessities like take-out lattes;
- No dividends: Dutch Bros does not pay dividends to its stockholders.
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In conclusion
Although Dutch Bros has come a long way, there is still room for growth. However, investors can benefit from this gradual process by building a position over time utilizing dollar-cost averaging. That way, they can minimize the impact of market volatility as contributions are spread over time instead of being invested as a lump sum.
Ultimately, the goal of investing is to make money over the long term, so investors should focus on where companies will be ten years from now rather than short-term fluctuations in the stock market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about buying Dutch Bros stock
What is Dutch Bros?
Dutch Bros. Coffee is a publicly traded coffee chain with drive-through locations across the United States. The company was founded by Dane and Travis Boersma in 1992 and is headquartered in Grants Pass, Oregon.
How to buy Dutch Bros stock?
Dutch Bros became a publicly traded company in September 2021, and its stock is available on the NYSE exchange under BROS, which means you can buy shares of Dutch Bros through your brokerage account.
Is Dutch Bros stock a buy?
Whether Dutch Bros is a suitable investment should be based on your risk tolerance, portfolio size, financial goals, and market experience. So always conduct your due diligence before trading. Also, note that past performance doesn’t guarantee future returns.
Where can I buy Dutch Bros stock?
You can buy Dutch Bros stock at various online brokers such as Interactive Brokers (IBKR) and eToro.
How much is Dutch Bros stock?
The current (as of December, 2023) Dutch Bros stock price is around $32.
Highly Rated Stock Trading & Investing Platform
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
