Key points
- Keurig Dr Pepper owns and licenses a portfolio of more than 125 brands in the beverage and coffee markets, including Snapple, Yoohoo, Mistic, Canada Dry and 7-Up.
- Private equity firm JAB Group Holdings orchestrated Keurig Green Mountain’s acquisition in 2013 and its merger with Dr Pepper Snapple Group in 2018.
- Keurig reaffirmed its 2024 guidance at an investor event for full-year 2024 EPS with high single-digit year-over-year growth and mid-single-digit revenue growth.
- 5 Stocks We Like Better Than Keurig Dr Pepper
Keurig Dr Pepper Inc. NASDAQ: KDP is a beverage company also specializing in single-serve coffee machines and pods. In fact, Keurig started the single-serve coffee market with its brewers and Green Mountain Coffee’s K-Cups. The consumer staples giant was born from the merger of Keurig Green Mountain and Dr Pepper Snapple Group.
The consumer staples company is a powerhouse in the beverage market. Compete with The Coca-Cola Co. NYSE: KO, PepsiCo Inc. NASDAQ:PEP, Monster Beverage Co. NASDAQ: MNST, Celsius Holdings Inc. NASDAQ:CELH AND Nestle SA OTCMKTS: NSRGF in the carbonated drinks, juice, water, tea and coffee segments. The company recently reaffirmed its guidance. With shares trading at 16.06X, future earnings discounted to the industry average of 21X, value traders may take interest.
Over 125 brands
Keurig Dr Pepper has a portfolio of more than 125 owned, partnered, licensed and related brands. Some of its popular brands include Canada Dry, Snapple, Yoohoo, Mistic, Nantucket Nectars, Mr. & Mrs. T, RC Cola, Stewart’s, A&W and Core. Xyience Energy, Rose Energy and Venom. Its popular partner brands include Evian, Polar, Starbucks, Dunkin, Lipton, Folgers, Gevalia, Eight O’Clock Celestial Seasonings, Café Bustelo, Caribou Coffee, Peet’s, Tazo, Tim Horton’s, illy and Maxwell House.
Earnings stable in the fourth quarter of 2023
Keurig Dr Pepper reported fourth-quarter 2023 EPS of 55 cents, beating analysts’ consensus estimates of 54 cents by a cent. Revenue rose 1.7% to $3.87 billion from $3.92 billion.
Soft ride
The company expects net sales to grow in the mid-single-digit range and adjusted diluted EPS growth in the high-single-digit range in 2024.
CEO Insights
Keurig Dr Pepper CEO Robert Gamgort commented that 2023 was a significant year for the company as it increased market share in most of its businesses. The company has entered multiple high-growth white spaces, including sports hydration and ready-to-drink coffee. The company returned more than $1.8 billion to investors, including a 7.5% dividend increase and the repurchase of 22 million shares. Dr Pepper Strawberries and Cream was the leading innovation launch in the carbonated soft drinks (CSD) category in 2023.
RTD Low and no alcohol growth
Gamgort commented: “For example, the launch of Schweppes mocktails in Latin America will build on our expertise in low-alcohol and alcohol-free ready-to-drink products in Canada. While the upcoming introductions of Dr Pepper Dark Berry in Mexico and a expansion of 0 CSDs in Canada Leverage Successful US Strategies Since the merger, we have expanded our international business at a strong double-digit CAGR from just over $1 billion in annual sales to nearly $2 billion. to see outsized growth potential in this segment, and it will continue to contribute significantly to KDP’s total results in 2024 and beyond.”
JAB Holdings Group reduces its stake
JAB is a private equity firm specializing in the acquisition of beverage companies. They orchestrated the acquisition and privatization of Keurig Green Mountain for $13.8 billion in 2016. The company was instrumental in the merger between Keurig and Dr Pepper Snapple Group. JAB held a controlling stake in both Snapple Beverage Group and Dr Pepper and helped merge the two companies. In 2018, JAB helped orchestrate the merger between Keurig and Dr Pepper Snapple. JAB became a major shareholder of the new company, owning nearly 74% of the shares. JAB has since reduced its holdings, cashing out most of its stake. On March 8, 2024, JAB reduced its active stake to 23.9%, from 27.6%
Keurig Dr Pepper analyst ratings and price targets I’m on MarketBeat. Keurig Dr Pepper peers and competitor actions can be found with MarketBeat Stock Screener.
Daily mug template
The daily candlestick chart on KDP illustrates a cup pattern. The lip line started at $31.44 on February 21, 2024, when shares fell to a low of $28.41 by March 15, 2024. A rounded bottom formed when KDP triggered a daily breakout of the lip structure market low (MSL) down to $29.35. Stocks rebounded as the daily relative strength index (RSI) rose above the 60 range. Pullback support levels are at $29.78, $28.97, $27.94 and $26.41.
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