KEURIG DR PEPPER INC (KDP) Stock Fundamental Analysis
NASDAQ:KDP - Nasdaq - US49271V1008 - Common Stock
We assign a fundamental rating of 4 out of 10 to KDP. KDP was compared to 31 industry peers in the Beverages industry. There are concerns on the financial health of KDP while its profitability can be described as average. KDP has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year KDP was profitable.
KDP had a positive operating cash flow in the past year.
Each year in the past 5 years KDP has been profitable.
KDP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
KDP has a Return On Assets (4.32%) which is comparable to the rest of the industry.
KDP has a Return On Equity (9.12%) which is comparable to the rest of the industry.
KDP's Return On Invested Capital of 6.11% is on the low side compared to the rest of the industry. KDP is outperformed by 64.29% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KDP is significantly below the industry average of 13.61%.
The 3 year average ROIC (5.66%) for KDP is below the current ROIC(6.11%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.32% | ||
| ROE | 9.12% | ||
| ROIC | 6.11% |
ROA(3y)3.73%
ROA(5y)3.28%
ROE(3y)7.6%
ROE(5y)6.75%
ROIC(3y)5.66%
ROIC(5y)5.4%
1.3 Margins
With a decent Profit Margin value of 15.04%, KDP is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Profit Margin of KDP has grown nicely.
With a decent Operating Margin value of 23.29%, KDP is doing good in the industry, outperforming 71.43% of the companies in the same industry.
KDP's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 55.69%, KDP is doing good in the industry, outperforming 75.00% 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 | 23.29% | ||
| PM (TTM) | 15.04% | ||
| GM | 55.69% |
OM growth 3Y-5.34%
OM growth 5Y5%
PM growth 3Y8.88%
PM growth 5Y13.33%
GM growth 3Y-1.04%
GM growth 5Y0.9%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KDP is destroying value.
KDP has less shares outstanding than it did 1 year ago.
The number of shares outstanding for KDP has been reduced compared to 5 years ago.
KDP has a worse debt/assets ratio than last year.
2.2 Solvency
KDP has an Altman-Z score of 1.50. 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 1.50, KDP is doing worse than 71.43% of the companies in the same industry.
KDP has a debt to FCF ratio of 14.76. This is a negative value and a sign of low solvency as KDP would need 14.76 years to pay back of all of its debts.
KDP has a worse Debt to FCF ratio (14.76) than 64.29% of its industry peers.
A Debt/Equity ratio of 0.60 indicates that KDP is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.60, KDP is in line with its industry, outperforming 57.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 14.76 | ||
| Altman-Z | 1.5 |
ROIC/WACC0.79
WACC7.69%
2.3 Liquidity
A Current Ratio of 0.53 indicates that KDP may have some problems paying its short term obligations.
The Current ratio of KDP (0.53) is worse than 85.71% of its industry peers.
A Quick Ratio of 0.34 indicates that KDP may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.34, KDP is doing worse than 78.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
KDP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.62%, which is quite good.
Measured over the past years, KDP shows a decrease in Earnings Per Share. The EPS has been decreasing by -9.07% on average per year.
Looking at the last year, KDP shows a small growth in Revenue. The Revenue has grown by 2.70% in the last year.
KDP shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.76% yearly.
EPS 1Y (TTM)8.62%
EPS 3Y8.54%
EPS 5Y-9.07%
EPS Q2Q%6.25%
Revenue 1Y (TTM)2.7%
Revenue growth 3Y8.44%
Revenue growth 5Y14.76%
Sales Q2Q%2.26%
3.2 Future
KDP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.86% yearly.
KDP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.10% yearly.
EPS Next Y7.94%
EPS Next 2Y7.34%
EPS Next 3Y7.26%
EPS Next 5Y6.86%
Revenue Next Year3.01%
Revenue Next 2Y4.25%
Revenue Next 3Y4.14%
Revenue Next 5Y4.1%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.77, the valuation of KDP can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of KDP indicates a somewhat cheap valuation: KDP is cheaper than 71.43% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of KDP to the average of the S&P500 Index (28.29), we can say KDP is valued slightly cheaper.
A Price/Forward Earnings ratio of 15.37 indicates a correct valuation of KDP.
Based on the Price/Forward Earnings ratio, KDP is valued a bit cheaper than 78.57% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.44. KDP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.77 | ||
| Fwd PE | 15.37 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as KDP.
Based on the Price/Free Cash Flow ratio, KDP is valued a bit more expensive than the industry average as 60.71% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.36 | ||
| EV/EBITDA | 13.78 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of KDP may justify a higher PE ratio.
PEG (NY)2.11
PEG (5Y)N/A
EPS Next 2Y7.34%
EPS Next 3Y7.26%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.94%, KDP has a reasonable but not impressive dividend return.
KDP's Dividend Yield is a higher than the industry average which is at 3.21.
KDP's Dividend Yield is a higher than the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
5.2 History
On average, the dividend of KDP grows each year by 22.77%, which is quite nice.
KDP has paid a dividend for at least 10 years, which is 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)22.77%
Div Incr Years4
Div Non Decr Years5
5.3 Sustainability
KDP pays out 51.93% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of KDP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP51.93%
EPS Next 2Y7.34%
EPS Next 3Y7.26%
KEURIG DR PEPPER INC
NASDAQ:KDP (1/22/2025, 3:29:04 PM)
31.69
-0.02 (-0.06%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners74.12%
Inst Owner Change0.09%
Ins Owners1%
Ins Owner Change-25.41%
Market Cap42.99B
Analysts74.78
Price Target39.16 (23.57%)
Short Float %1.98%
Short Ratio2.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.94% |
Yearly Dividend0.82
Dividend Growth(5Y)22.77%
DP51.93%
Div Incr Years4
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.73%
Min EPS beat(2)-0.91%
Max EPS beat(2)-0.55%
EPS beat(4)2
Avg EPS beat(4)2.01%
Min EPS beat(4)-0.91%
Max EPS beat(4)8.8%
EPS beat(8)5
Avg EPS beat(8)1.49%
EPS beat(12)5
Avg EPS beat(12)0.7%
EPS beat(16)7
Avg EPS beat(16)0.61%
Revenue beat(2)0
Avg Revenue beat(2)-1.35%
Min Revenue beat(2)-1.89%
Max Revenue beat(2)-0.81%
Revenue beat(4)1
Avg Revenue beat(4)-1.02%
Min Revenue beat(4)-2.18%
Max Revenue beat(4)0.78%
Revenue beat(8)3
Avg Revenue beat(8)-0.27%
Revenue beat(12)6
Avg Revenue beat(12)0.29%
Revenue beat(16)10
Avg Revenue beat(16)0.89%
PT rev (1m)0.29%
PT rev (3m)2.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.9%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.77 | ||
| Fwd PE | 15.37 | ||
| P/S | 2.84 | ||
| P/FCF | 40.36 | ||
| P/OCF | 25.79 | ||
| P/B | 1.72 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.78 |
EPS(TTM)1.89
EY5.96%
EPS(NY)2.06
Fwd EY6.51%
FCF(TTM)0.79
FCFY2.48%
OCF(TTM)1.23
OCFY3.88%
SpS11.17
BVpS18.41
TBVpS-13.4
PEG (NY)2.11
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.32% | ||
| ROE | 9.12% | ||
| ROCE | 7.84% | ||
| ROIC | 6.11% | ||
| ROICexc | 6.18% | ||
| ROICexgc | 86.25% | ||
| OM | 23.29% | ||
| PM (TTM) | 15.04% | ||
| GM | 55.69% | ||
| FCFM | 7.03% |
ROA(3y)3.73%
ROA(5y)3.28%
ROE(3y)7.6%
ROE(5y)6.75%
ROIC(3y)5.66%
ROIC(5y)5.4%
ROICexc(3y)5.72%
ROICexc(5y)5.44%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)7.12%
ROCE(5y)6.77%
ROICexcg growth 3YN/A
ROICexcg growth 5Y2.94%
ROICexc growth 3Y0.2%
ROICexc growth 5Y20.28%
OM growth 3Y-5.34%
OM growth 5Y5%
PM growth 3Y8.88%
PM growth 5Y13.33%
GM growth 3Y-1.04%
GM growth 5Y0.9%
F-Score7
Asset Turnover0.29
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.6 | ||
| Debt/FCF | 14.76 | ||
| Debt/EBITDA | 3.7 | ||
| Cap/Depr | 110.06% | ||
| Cap/Sales | 3.97% | ||
| Interest Coverage | 7.11 | ||
| Cash Conversion | 40.91% | ||
| Profit Quality | 46.75% | ||
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 1.5 |
F-Score7
WACC7.69%
ROIC/WACC0.79
Cap/Depr(3y)81.15%
Cap/Depr(5y)80.04%
Cap/Sales(3y)3.18%
Cap/Sales(5y)3.45%
Profit Quality(3y)107.59%
Profit Quality(5y)127.46%
High Growth Momentum
Growth
EPS 1Y (TTM)8.62%
EPS 3Y8.54%
EPS 5Y-9.07%
EPS Q2Q%6.25%
EPS Next Y7.94%
EPS Next 2Y7.34%
EPS Next 3Y7.26%
EPS Next 5Y6.86%
Revenue 1Y (TTM)2.7%
Revenue growth 3Y8.44%
Revenue growth 5Y14.76%
Sales Q2Q%2.26%
Revenue Next Year3.01%
Revenue Next 2Y4.25%
Revenue Next 3Y4.14%
Revenue Next 5Y4.1%
EBIT growth 1Y10.87%
EBIT growth 3Y2.65%
EBIT growth 5Y20.5%
EBIT Next Year25.4%
EBIT Next 3Y11.01%
EBIT Next 5Y7.46%
FCF growth 1Y-59.98%
FCF growth 3Y-24.09%
FCF growth 5Y-9.96%
OCF growth 1Y-45.15%
OCF growth 3Y-18.51%
OCF growth 5Y-3.8%