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 32 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 valuation in line with the averages, but on the other hand it scores bad on growth.
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
The Return On Assets of KDP (2.80%) is worse than 62.50% of its industry peers.
KDP has a Return On Equity (6.15%) which is in line with its industry peers.
KDP's Return On Invested Capital of 5.58% is on the low side compared to the rest of the industry. KDP is outperformed by 68.75% 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 11.61%.
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
KDP has a Profit Margin of 9.69%. This is in the better half of the industry: KDP outperforms 68.75% of its industry peers.
In the last couple of years the Profit Margin of KDP has declined.
KDP's Operating Margin of 22.12% is fine compared to the rest of the industry. KDP outperforms 75.00% of its industry peers.
KDP's Operating Margin has been stable in the last couple of years.
The Gross Margin of KDP (55.25%) is better than 75.00% of its industry peers.
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.
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.
Compared to 1 year ago, KDP has a worse debt to assets ratio.
2.2 Solvency
KDP has an Altman-Z score of 1.46. This is a bad value and indicates that KDP is not financially healthy and even has some risk of bankruptcy.
KDP has a worse Altman-Z score (1.46) than 65.63% of its industry peers.
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.
KDP has a Debt to FCF ratio (9.45) which is in line with its industry peers.
KDP has a Debt/Equity ratio of 0.64. This is a neutral value indicating KDP is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.64, KDP is in line with its industry, outperforming 56.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 9.45 | ||
| Altman-Z | 1.46 |
ROIC/WACC0.76
WACC7.38%
2.3 Liquidity
A Current Ratio of 0.47 indicates that KDP may have some problems paying its short term obligations.
The Current ratio of KDP (0.47) is worse than 84.38% of its industry peers.
A Quick Ratio of 0.29 indicates that KDP may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.29, KDP is doing worse than 84.38% of the companies in the same industry.
| 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.
The Revenue has been growing slightly by 3.95% in the past year.
Measured over the past years, KDP shows a small growth in Revenue. The Revenue has been growing by 6.66% on average per year.
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 Y7.2%
EPS Next 2Y6.8%
EPS Next 3Y6.74%
EPS Next 5Y3.06%
Revenue Next Year5.77%
Revenue Next 2Y4.87%
Revenue Next 3Y4.46%
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.
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
KDP is valuated rather expensively with a Price/Earnings ratio of 17.24.
65.63% of the companies in the same industry are more expensive than KDP, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.45, KDP is valued a bit cheaper.
With a Price/Forward Earnings ratio of 15.43, KDP is valued correctly.
Based on the Price/Forward Earnings ratio, KDP is valued cheaper than 81.25% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of KDP to the average of the S&P500 Index (21.89), we can say KDP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.24 | ||
| Fwd PE | 15.43 |
4.2 Price Multiples
KDP's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, KDP is valued a bit cheaper than the industry average as 65.63% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.84 | ||
| EV/EBITDA | 14.78 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)2.4
PEG (5Y)1.82
EPS Next 2Y6.8%
EPS Next 3Y6.74%
5. Dividend
5.1 Amount
KDP has a Yearly Dividend Yield of 2.72%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.02, KDP pays a bit more dividend than its industry peers.
KDP's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
5.2 History
The dividend of KDP is nicely growing with an annual growth rate of 7.69%!
KDP has been paying a dividend for at least 10 years, so it has a reliable track record.
As KDP did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
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 2Y6.8%
EPS Next 3Y6.74%
33.79
-0.05 (-0.15%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners87.35%
Inst Owner Change-65.26%
Ins Owners0.65%
Ins Owner Change0.98%
Market Cap45.89B
Analysts77.6
Price Target40.16 (18.85%)
Short Float %1.63%
Short Ratio1.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.72% |
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)-1.1%
EPS NY rev (1m)0%
EPS NY rev (3m)0.46%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.24 | ||
| Fwd PE | 15.43 | ||
| P/S | 2.96 | ||
| P/FCF | 25.84 | ||
| P/OCF | 19.59 | ||
| P/B | 1.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.78 |
EPS(TTM)1.96
EY5.8%
EPS(NY)2.19
Fwd EY6.48%
FCF(TTM)1.31
FCFY3.87%
OCF(TTM)1.73
OCFY5.11%
SpS11.43
BVpS18
TBVpS-14.16
PEG (NY)2.4
PEG (5Y)1.82
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 | 1.46 |
F-Score6
WACC7.38%
ROIC/WACC0.76
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 Y7.2%
EPS Next 2Y6.8%
EPS Next 3Y6.74%
EPS Next 5Y3.06%
Revenue 1Y (TTM)3.95%
Revenue growth 3Y6.57%
Revenue growth 5Y6.66%
Sales Q2Q%4.82%
Revenue Next Year5.77%
Revenue Next 2Y4.87%
Revenue Next 3Y4.46%
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%