NYSE:KDP

Stock Analysis Report

Executive Summary

Keurig Dr Pepper Inc. operates as a beverage company in the United States and internationally.

Rewards

Trading at 23% below its fair value

Earnings are forecast to grow 31.48% per year

Risk Analysis

Debt is not well covered by operating cash flow

Shareholders have been substantially diluted in the past year

Unstable dividend track record

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Keurig Dr Pepper's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KDP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.9%

KDP

-0.07%

US Beverage

1.1%

US Market


1 Year Return

11.6%

KDP

10.1%

US Beverage

17.8%

US Market

Return vs Industry: KDP exceeded the US Beverage industry which returned 10.1% over the past year.

Return vs Market: KDP underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

KDPIndustryMarket
7 Day-2.9%-0.07%1.1%
30 Day0.6%2.0%1.4%
90 Day5.4%-1.3%3.9%
1 Year14.1%11.6%13.0%10.1%20.3%17.8%
3 Yearn/a35.9%25.3%44.8%35.4%
5 Yearn/a60.0%39.8%71.3%52.4%

Price Volatility Vs. Market

How volatile is Keurig Dr Pepper's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Keurig Dr Pepper undervalued compared to its fair value and its price relative to the market?

23.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KDP ($29.16) is trading below our estimate of fair value ($37.85)

Significantly Below Fair Value: KDP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: KDP is poor value based on its PE Ratio (36.8x) compared to the Beverage industry average (29.7x).

PE vs Market: KDP is poor value based on its PE Ratio (36.8x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: KDP is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: KDP is good value based on its PB Ratio (1.8x) compared to the US Beverage industry average (3.3x).


Next Steps

Future Growth

How is Keurig Dr Pepper forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

31.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KDP's forecast earnings growth (31.5% per year) is above the savings rate (1.7%).

Earnings vs Market: KDP's earnings (31.5% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KDP's revenue (3.1% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: KDP's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KDP's Return on Equity is forecast to be low in 3 years time (8.9%).


Next Steps

Past Performance

How has Keurig Dr Pepper performed over the past 5 years?

19.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KDP has a large one-off loss of $548.0M impacting its September 30 2019 financial results.

Growing Profit Margin: KDP's current net profit margins (10.1%) are lower than last year (40.5%).


Past Earnings Growth Analysis

Earnings Trend: KDP's earnings have grown by 19.6% per year over the past 5 years.

Accelerating Growth: KDP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KDP had negative earnings growth (-56%) over the past year, making it difficult to compare to the Beverage industry average (6.8%).


Return on Equity

High ROE: KDP's Return on Equity (4.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Keurig Dr Pepper's financial position?


Financial Position Analysis

Short Term Liabilities: KDP's short term assets ($2.3B) do not cover its short term liabilities ($6.6B).

Long Term Liabilities: KDP's short term assets ($2.3B) do not cover its long term liabilities ($19.9B).


Debt to Equity History and Analysis

Debt Level: KDP's debt to equity ratio (65.1%) is considered high.

Reducing Debt: KDP's debt to equity ratio has increased from 4.7% to 65.1% over the past 5 years.

Debt Coverage: KDP's debt is not well covered by operating cash flow (15.8%).

Interest Coverage: KDP's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

Inventory Level: KDP has a low level of unsold assets or inventory.

Debt Coverage by Assets: KDP's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Keurig Dr Pepper's current dividend yield, its reliability and sustainability?

2.06%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Keurig Dr Pepper before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: KDP's dividend (2.06%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: KDP's dividend (2.06%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether KDP's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if KDP's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (75.6%), KDP's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KDP's dividends in 3 years are forecast to be well covered by earnings (37.8% payout ratio).


Next Steps

Management

What is the CEO of Keurig Dr Pepper's salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure


CEO

Bob Gamgort (57yo)

3.6yrs

Tenure

0

Mr. Robert J. Gamgort, also known as Bob, has been Chief Executive Officer at Keurig Dr Pepper Inc.(formerly known as Keurig Green Mountain, Inc). since May 02, 2016 and has been its Executive Director sin ...


Management Age and Tenure

3.6yrs

Average Tenure

63yo

Average Age

Experienced Management: KDP's management team is considered experienced (3.6 years average tenure).


Board Age and Tenure

1.4yrs

Average Tenure

63yo

Average Age

Experienced Board: KDP's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: KDP insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$75,23004 Dec 19
Mary DeNooyer
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares2,500
Max PriceUS$30.09
BuyUS$135,21919 Nov 19
Robert Singer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares4,500
Max PriceUS$30.35
BuyUS$146,40712 Nov 19
Robert Singer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares5,000
Max PriceUS$29.43
BuyUS$161,81911 Sep 19
Mary DeNooyer
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares6,000
Max PriceUS$26.97
BuyUS$130,80505 Sep 19
Maria Sceppaguercio-Gever
EntityIndividual
Shares5,000
Max PriceUS$26.16
BuyUS$161,12404 Sep 19
Mary DeNooyer
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares6,000
Max PriceUS$26.85
BuyUS$160,66728 Aug 19
Mary DeNooyer
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares6,000
Max PriceUS$26.78
BuyUS$167,96021 Aug 19
Mary DeNooyer
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares6,000
Max PriceUS$27.99
BuyUS$525,35514 Aug 19
Brian Loucks
EntityIndividual
Shares18,554
Max PriceUS$28.50
BuyUS$171,33714 Aug 19
Mary DeNooyer
EntityIndividual
Role
Head of Human Resources
Chief Human Resources Officer
Shares6,000
Max PriceUS$28.56
BuyUS$110,76214 Aug 19
Robert Singer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares4,000
Max PriceUS$27.88
BuyUS$85,95413 Aug 19
Robert Singer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares3,000
Max PriceUS$28.73
SellUS$278,000,00028 May 19
JAB Holdings B.V.
EntityCompany
Shares10,000,000
Max PriceUS$27.80
SellUS$31,086,04828 May 19
JAB Holdings B.V.
EntityCompany
Shares1,110,216
Max PriceUS$28.00
BuyUS$57,96928 May 19
Robert Singer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares2,000
Max PriceUS$29.05
SellUS$1,469,208,59217 May 19
JAB Holdings B.V.
EntityCompany
Shares52,902,300
Max PriceUS$28.25
BuyUS$86,77617 May 19
Robert Singer
EntityIndividual
Role
Member of the Board of Directors
Director
Shares3,000
Max PriceUS$28.93
SellUS$1,289,131,12616 May 19
JAB Holdings B.V.
EntityCompany
Shares46,475,703
Max PriceUS$28.25
BuyUS$170,90515 Mar 19
Brian Loucks
EntityIndividual
Shares6,250
Max PriceUS$27.34
BuyUS$223,43011 Mar 19
Brian Loucks
EntityIndividual
Shares8,500
Max PriceUS$26.29
BuyUS$296,38305 Mar 19
Angela Stephens
EntityIndividual
Shares11,535
Max PriceUS$25.99
BuyUS$3,989,00805 Mar 19
Peter Harf
EntityIndividual
Role
Member of the Board of Directors
Director
Shares156,800
Max PriceUS$25.44
BuyUS$508,69605 Mar 19
Olivier Goudet
EntityIndividual
Shares20,000
Max PriceUS$25.43

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 50.2%.


Management Team

  • Bob Stiller (75yo)

    • Tenure: 0yrs
    • Compensation: US$102.65k
  • Mark Wood

    Chief Business Development & Partners Officer

    • Tenure: 4.3yrs
  • John Whoriskey (69yo)

    Executive Advisor

    • Tenure: 4.2yrs
    • Compensation: US$1.06m
  • Bob Gamgort (57yo)

    Executive Chairman President

    • Tenure: 3.6yrs
  • Andrew Springate

    Chief Marketing Officer

    • Tenure: 1.4yrs
  • Mary DeNooyer (49yo)

    Chief Human Resources Officer

    • Tenure: 0.4yrs
  • Monique Oxender

    Chief Sustainability Officer

    • Tenure: 0yrs
  • Ozan Dokmecioglu

    Chief Financial Officer

    • Tenure: 3.6yrs
  • Jim Baldwin

    Chief Legal Officer

    • Tenure: 1.4yrs
  • Tyson Seely

    Vice President of Investor Relations

    • Tenure: 0yrs

Board Members

  • Bob Singer (67yo)

    Director

    • Tenure: 1.4yrs
  • Larry Young (64yo)

    Director

    • Tenure: 1.4yrs
  • Peter Harf (73yo)

    Director

    • Tenure: 1.4yrs
  • Pam Patsley (62yo)

    Director

    • Tenure: 1.4yrs
  • Paul Michaels (67yo)

    Director

    • Tenure: 1.4yrs
  • Bob Gamgort (57yo)

    Executive Chairman President

    • Tenure: 3.6yrs
  • Dirk Van de Put (58yo)

    Director

    • Tenure: 1.4yrs
  • Anna-lena Kamenetzky-wetzel

    Director

    • Tenure: 1.4yrs
  • Gerd Pleuhs (62yo)

    Director

    • Tenure: 1.4yrs
  • Genevieve Hovde

    Director

    • Tenure: 1.4yrs

Company Information

Keurig Dr Pepper Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Keurig Dr Pepper Inc.
  • Ticker: KDP
  • Exchange: NYSE
  • Founded: 1981
  • Industry: Soft Drinks
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$41.022b
  • Shares outstanding: 1.41b
  • Website: https://www.keurigdrpepper.com

Number of Employees


Location

  • Keurig Dr Pepper Inc.
  • 53 South Avenue
  • Burlington
  • Massachusetts
  • 1803
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KDPNYSE (New York Stock Exchange)YesCommon SharesUSUSDJul 2018
DP5DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2018
0Z62LSE (London Stock Exchange)YesCommon SharesGBUSDJul 2018
KDPWBAG (Wiener Boerse AG)YesCommon SharesATEURJul 2018

Biography

Keurig Dr Pepper Inc. operates as a beverage company in the United States and internationally. It operates through four segments: Beverage Concentrates, Packaged Beverages, Latin America Beverages, and Cof ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 01:05
End of Day Share Price2019/12/10 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.