KEURIG DR PEPPER INC (KDP) Stock Fundamental Analysis
NASDAQ:KDP - Nasdaq - US49271V1008 - Common Stock - Currency: USD
KDP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 32 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 has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year KDP was profitable.
KDP had a positive operating cash flow in the past year.
In the past 5 years KDP has always been profitable.
Each year in the past 5 years KDP had a positive operating cash flow.
1.2 Ratios
KDP has a worse Return On Assets (2.80%) than 62.50% of its industry peers.
KDP has a Return On Equity of 6.15%. This is in the lower half of the industry: KDP underperforms 62.50% of its industry peers.
KDP has a worse Return On Invested Capital (5.58%) than 68.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for KDP is significantly below the industry average of 11.91%.
The last Return On Invested Capital (5.58%) for KDP is above the 3 year average (5.40%), which is a sign of increasing profitability.
| 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's Profit Margin of 9.69% is fine compared to the rest of the industry. KDP outperforms 68.75% of its industry peers.
In the last couple of years the Profit Margin of KDP has declined.
Looking at the Operating Margin, with a value of 22.12%, KDP is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
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.
In the last couple of years the Gross Margin of KDP has remained more or less at the same level.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
Based on the Altman-Z score of 1.47, we must say that KDP is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of KDP (1.47) is worse than 62.50% of its industry peers.
KDP has a debt to FCF ratio of 9.45. This is a negative value and a sign of low solvency as KDP would need 9.45 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.45, KDP is in line with its industry, outperforming 46.88% of the companies in the same industry.
A Debt/Equity ratio of 0.64 indicates that KDP is somewhat dependend on debt financing.
KDP has a Debt to Equity ratio of 0.64. This is comparable to the rest of the industry: KDP outperforms 59.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 9.45 | ||
| Altman-Z | 1.47 |
ROIC/WACC0.75
WACC7.46%
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.
Looking at the Current ratio, with a value of 0.47, KDP is doing worse than 87.50% of the companies in the same industry.
A Quick Ratio of 0.29 indicates that KDP may have some problems paying its short term obligations.
With a Quick ratio value of 0.29, KDP is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
| 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
KDP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.06% yearly.
Based on estimates for the next years, KDP will show a small growth in Revenue. The Revenue will grow by 4.03% 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 5Y4.03%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
KDP is valuated rather expensively with a Price/Earnings ratio of 17.28.
Compared to the rest of the industry, the Price/Earnings ratio of KDP indicates a somewhat cheap valuation: KDP is cheaper than 75.00% of the companies listed in the same industry.
KDP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.60.
The Price/Forward Earnings ratio is 15.46, which indicates a correct valuation of KDP.
Based on the Price/Forward Earnings ratio, KDP is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of KDP to the average of the S&P500 Index (22.43), we can say KDP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.28 | ||
| Fwd PE | 15.46 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KDP indicates a somewhat cheap valuation: KDP is cheaper than 62.50% of the companies listed in the same industry.
KDP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. KDP is cheaper than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.9 | ||
| EV/EBITDA | 14.8 |
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)2.4
PEG (5Y)1.82
EPS Next 2Y6.8%
EPS Next 3Y6.74%
5. Dividend
5.1 Amount
KDP has a Yearly Dividend Yield of 2.74%.
KDP's Dividend Yield is a higher than the industry average which is at 2.84.
Compared to an average S&P500 Dividend Yield of 2.36, KDP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
The dividend of KDP is nicely growing with an annual growth rate of 7.69%!
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)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.
The dividend of KDP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP80.25%
EPS Next 2Y6.8%
EPS Next 3Y6.74%
33.87
+0.04 (+0.12%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner Change7.75%
Ins Owners1.01%
Ins Owner Change1.07%
Market Cap46.00B
Analysts77.6
Price Target39.85 (17.66%)
Short Float %1.7%
Short Ratio1.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
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)2.04%
PT rev (3m)4.4%
EPS NQ rev (1m)-1.21%
EPS NQ rev (3m)-0.94%
EPS NY rev (1m)0.42%
EPS NY rev (3m)0.36%
Revenue NQ rev (1m)0.31%
Revenue NQ rev (3m)0.17%
Revenue NY rev (1m)0.32%
Revenue NY rev (3m)0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.28 | ||
| Fwd PE | 15.46 | ||
| P/S | 2.96 | ||
| P/FCF | 25.9 | ||
| P/OCF | 19.63 | ||
| P/B | 1.88 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.8 |
EPS(TTM)1.96
EY5.79%
EPS(NY)2.19
Fwd EY6.47%
FCF(TTM)1.31
FCFY3.86%
OCF(TTM)1.73
OCFY5.09%
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 | 1.47 |
F-Score6
WACC7.46%
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 Y7.2%
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 5Y4.03%
EBIT growth 1Y1.51%
EBIT growth 3Y2.56%
EBIT growth 5Y7.55%
EBIT Next Year22.01%
EBIT Next 3Y10.4%
EBIT Next 5Y4.61%
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%