KEURIG DR PEPPER INC (KDP) Stock Fundamental Analysis
NASDAQ:KDP - Nasdaq - US49271V1008 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to KDP. KDP was compared to 33 industry peers in the Beverages industry. While KDP is still in line with the averages on profitability rating, there are concerns on its financial health. KDP is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
KDP had positive earnings in the past year.
In the past year KDP had a positive cash flow from operations.
In the past 5 years KDP has always been profitable.
KDP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.80%, KDP is doing worse than 63.64% of the companies in the same industry.
KDP's Return On Equity of 6.15% is on the low side compared to the rest of the industry. KDP is outperformed by 60.61% of its industry peers.
KDP has a worse Return On Invested Capital (5.58%) than 69.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for KDP is significantly below the industry average of 11.23%.
The 3 year average ROIC (5.40%) for KDP is below the current ROIC(5.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.8% | ||
| ROE | 6.15% | ||
| ROIC | 5.58% |
ROA(3y)3.22%
ROA(5y)3.31%
ROE(3y)6.72%
ROE(5y)6.86%
ROIC(3y)5.4%
ROIC(5y)5.42%
1.3 Margins
With a decent Profit Margin value of 9.69%, KDP is doing good in the industry, outperforming 69.70% of the companies in the same industry.
KDP's Profit Margin has declined in the last couple of years.
KDP has a better Operating Margin (22.12%) than 75.76% of its industry peers.
KDP's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 55.25%, KDP is doing good in the industry, outperforming 75.76% of the companies in the same industry.
KDP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.12% | ||
| PM (TTM) | 9.69% | ||
| GM | 55.25% |
OM growth 3Y-3.77%
OM growth 5Y0.83%
PM growth 3Y-17.83%
PM growth 5Y-3.6%
GM growth 3Y0.21%
GM growth 5Y-0.52%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KDP is destroying value.
Compared to 1 year ago, KDP has less shares outstanding
Compared to 5 years ago, KDP has less shares outstanding
Compared to 1 year ago, KDP has a worse debt to assets ratio.
2.2 Solvency
KDP has an Altman-Z score of 1.47. This is a bad value and indicates that KDP is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.47, KDP is doing worse than 63.64% of the companies in the same industry.
The Debt to FCF ratio of KDP is 9.45, which is on the high side as it means it would take KDP, 9.45 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 9.45, KDP perfoms like the industry average, outperforming 42.42% of the companies in the same industry.
KDP has a Debt/Equity ratio of 0.64. This is a neutral value indicating KDP is somewhat dependend on debt financing.
KDP's Debt to Equity ratio of 0.64 is in line compared to the rest of the industry. KDP outperforms 54.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 9.45 | ||
| Altman-Z | 1.47 |
ROIC/WACC0.75
WACC7.43%
2.3 Liquidity
KDP has a Current Ratio of 0.47. This is a bad value and indicates that KDP is not financially healthy enough and could expect problems in meeting its short term obligations.
KDP's Current ratio of 0.47 is on the low side compared to the rest of the industry. KDP is outperformed by 84.85% of its industry peers.
KDP has a Quick Ratio of 0.47. This is a bad value and indicates that KDP is not financially healthy enough and could expect problems in meeting its short term obligations.
KDP has a worse Quick ratio (0.29) than 84.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.47 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
KDP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.10%.
The Earnings Per Share has been growing by 9.49% on average over the past years. This is quite good.
Looking at the last year, KDP shows a small growth in Revenue. The Revenue has grown by 3.95% in the last year.
KDP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.66% yearly.
EPS 1Y (TTM)7.1%
EPS 3Y6.27%
EPS 5Y9.49%
EPS Q2Q%10.53%
Revenue 1Y (TTM)3.95%
Revenue growth 3Y6.57%
Revenue growth 5Y6.66%
Sales Q2Q%4.82%
3.2 Future
Based on estimates for the next years, KDP will show a small growth in Earnings Per Share. The EPS will grow by 3.06% on average per year.
Based on estimates for the next years, KDP will show a small growth in Revenue. The Revenue will grow by 4.07% on average per year.
EPS Next Y7.26%
EPS Next 2Y6.82%
EPS Next 3Y6.78%
EPS Next 5Y3.06%
Revenue Next Year5.78%
Revenue Next 2Y4.88%
Revenue Next 3Y4.48%
Revenue Next 5Y4.07%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.11, KDP is valued on the expensive side.
Based on the Price/Earnings ratio, KDP is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.50, KDP is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.31, the valuation of KDP can be described as correct.
KDP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. KDP is cheaper than 75.76% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.44. KDP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.11 | ||
| Fwd PE | 15.31 |
4.2 Price Multiples
KDP's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of KDP indicates a somewhat cheap valuation: KDP is cheaper than 66.67% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.65 | ||
| EV/EBITDA | 14.81 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KDP does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.36
PEG (5Y)1.8
EPS Next 2Y6.82%
EPS Next 3Y6.78%
5. Dividend
5.1 Amount
KDP has a Yearly Dividend Yield of 2.71%.
KDP's Dividend Yield is a higher than the industry average which is at 3.05.
KDP's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
5.2 History
On average, the dividend of KDP grows each year by 7.69%, which is quite nice.
KDP has been paying a dividend for at least 10 years, so it has a reliable track record.
KDP has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)7.69%
Div Incr Years4
Div Non Decr Years5
5.3 Sustainability
KDP pays out 80.25% of its income as dividend. This is not a sustainable payout ratio.
KDP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP80.25%
EPS Next 2Y6.82%
EPS Next 3Y6.78%
33.54
-0.35 (-1.03%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners87.35%
Inst Owner Change0%
Ins Owners0.65%
Ins Owner Change0.98%
Market Cap45.55B
Analysts77.6
Price Target39.69 (18.34%)
Short Float %2.09%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
Yearly Dividend0.87
Dividend Growth(5Y)7.69%
DP80.25%
Div Incr Years4
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.5%
Min EPS beat(2)0.25%
Max EPS beat(2)8.75%
EPS beat(4)2
Avg EPS beat(4)1.89%
Min EPS beat(4)-0.91%
Max EPS beat(4)8.75%
EPS beat(8)6
Avg EPS beat(8)2.7%
EPS beat(12)7
Avg EPS beat(12)1.58%
EPS beat(16)8
Avg EPS beat(16)1.12%
Revenue beat(2)2
Avg Revenue beat(2)0.54%
Min Revenue beat(2)0.22%
Max Revenue beat(2)0.86%
Revenue beat(4)2
Avg Revenue beat(4)-0.4%
Min Revenue beat(4)-1.89%
Max Revenue beat(4)0.86%
Revenue beat(8)4
Avg Revenue beat(8)-0.17%
Revenue beat(12)6
Avg Revenue beat(12)0.15%
Revenue beat(16)10
Avg Revenue beat(16)0.49%
PT rev (1m)0.76%
PT rev (3m)2.82%
EPS NQ rev (1m)-0.14%
EPS NQ rev (3m)-1.35%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.52%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)0.26%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.11 | ||
| Fwd PE | 15.31 | ||
| P/S | 2.94 | ||
| P/FCF | 25.65 | ||
| P/OCF | 19.44 | ||
| P/B | 1.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.81 |
EPS(TTM)1.96
EY5.84%
EPS(NY)2.19
Fwd EY6.53%
FCF(TTM)1.31
FCFY3.9%
OCF(TTM)1.73
OCFY5.14%
SpS11.43
BVpS18
TBVpS-14.16
PEG (NY)2.36
PEG (5Y)1.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.8% | ||
| ROE | 6.15% | ||
| ROCE | 7.71% | ||
| ROIC | 5.58% | ||
| ROICexc | 5.65% | ||
| ROICexgc | 82.82% | ||
| OM | 22.12% | ||
| PM (TTM) | 9.69% | ||
| GM | 55.25% | ||
| FCFM | 11.44% |
ROA(3y)3.22%
ROA(5y)3.31%
ROE(3y)6.72%
ROE(5y)6.86%
ROIC(3y)5.4%
ROIC(5y)5.42%
ROICexc(3y)5.46%
ROICexc(5y)5.47%
ROICexgc(3y)231.8%
ROICexgc(5y)N/A
ROCE(3y)7.24%
ROCE(5y)7.17%
ROICexcg growth 3YN/A
ROICexcg growth 5Y-33.84%
ROICexc growth 3Y0.57%
ROICexc growth 5Y6.63%
OM growth 3Y-3.77%
OM growth 5Y0.83%
PM growth 3Y-17.83%
PM growth 5Y-3.6%
GM growth 3Y0.21%
GM growth 5Y-0.52%
F-Score6
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 9.45 | ||
| Debt/EBITDA | 3.91 | ||
| Cap/Depr | 101.07% | ||
| Cap/Sales | 3.65% | ||
| Interest Coverage | 6.1 | ||
| Cash Conversion | 58.66% | ||
| Profit Quality | 118.09% | ||
| Current Ratio | 0.47 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | 1.47 |
F-Score6
WACC7.43%
ROIC/WACC0.75
Cap/Depr(3y)90.63%
Cap/Depr(5y)91.99%
Cap/Sales(3y)3.33%
Cap/Sales(5y)3.61%
Profit Quality(3y)106.96%
Profit Quality(5y)115.99%
High Growth Momentum
Growth
EPS 1Y (TTM)7.1%
EPS 3Y6.27%
EPS 5Y9.49%
EPS Q2Q%10.53%
EPS Next Y7.26%
EPS Next 2Y6.82%
EPS Next 3Y6.78%
EPS Next 5Y3.06%
Revenue 1Y (TTM)3.95%
Revenue growth 3Y6.57%
Revenue growth 5Y6.66%
Sales Q2Q%4.82%
Revenue Next Year5.78%
Revenue Next 2Y4.88%
Revenue Next 3Y4.48%
Revenue Next 5Y4.07%
EBIT growth 1Y1.51%
EBIT growth 3Y2.56%
EBIT growth 5Y7.55%
EBIT Next Year20.96%
EBIT Next 3Y10.05%
EBIT Next 5Y5.98%
FCF growth 1Y-5.13%
FCF growth 3Y-12.93%
FCF growth 5Y-5.41%
OCF growth 1Y4.37%
OCF growth 3Y-8.26%
OCF growth 5Y-2.15%