KEURIG DR PEPPER INC (KDP) Stock Fundamental Analysis
NASDAQ:KDP - Nasdaq - US49271V1008 - Common Stock - Currency: USD
Overall KDP gets a fundamental rating of 4 out of 10. We evaluated KDP against 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
In the past year KDP was profitable.
In the past year KDP had a positive cash flow from operations.
KDP had positive earnings in each of the past 5 years.
Each year in the past 5 years KDP had a positive operating cash flow.
1.2 Ratios
KDP's Return On Assets of 2.80% is in line compared to the rest of the industry. KDP outperforms 40.63% of its industry peers.
KDP has a Return On Equity (6.15%) which is comparable to the rest of the industry.
With a Return On Invested Capital value of 5.58%, KDP is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for KDP is significantly below the industry average of 12.21%.
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
Looking at the Profit Margin, with a value of 9.69%, KDP is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
KDP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 22.12%, KDP is in the better half of the industry, outperforming 71.88% of the companies in the same industry.
In the last couple of years the Operating Margin of KDP has remained more or less at the same level.
Looking at the Gross Margin, with a value of 55.25%, KDP is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
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
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.
KDP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for KDP is higher compared to a year ago.
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.
KDP has a Altman-Z score (1.47) which is comparable to the rest of the industry.
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.
KDP's Debt to FCF ratio of 9.45 is in line compared to the rest of the industry. KDP outperforms 46.88% of 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.
With a Debt to Equity ratio value of 0.64, KDP perfoms like the industry average, outperforming 59.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 9.45 | ||
| Altman-Z | 1.47 |
ROIC/WACC0.77
WACC7.28%
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 81.25% of the companies in the same industry.
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.
Looking at the Quick ratio, with a value of 0.29, KDP is doing worse than 81.25% 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.
KDP shows a small growth in Revenue. In the last year, the Revenue has grown by 3.95%.
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
The Earnings Per Share is expected to grow by 3.06% on average over the next years.
KDP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.03% yearly.
EPS Next Y6.75%
EPS Next 2Y7.03%
EPS Next 3Y7.01%
EPS Next 5Y3.06%
Revenue Next Year5.48%
Revenue Next 2Y4.73%
Revenue Next 3Y4.45%
Revenue Next 5Y4.03%
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
A Price/Earnings ratio of 17.65 indicates a rather expensive valuation of KDP.
Compared to the rest of the industry, the Price/Earnings ratio of KDP indicates a somewhat cheap valuation: KDP is cheaper than 71.88% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.88. KDP is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 15.73, 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.
KDP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.20, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.65 | ||
| Fwd PE | 15.73 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KDP is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, KDP is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.42 | ||
| EV/EBITDA | 14.91 |
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)2.61
PEG (5Y)1.86
EPS Next 2Y7.03%
EPS Next 3Y7.01%
5. Dividend
5.1 Amount
KDP has a Yearly Dividend Yield of 2.70%.
Compared to an average industry Dividend Yield of 3.03, KDP pays a bit more dividend than its industry peers.
KDP's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
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
80.25% of the earnings are spent on dividend by KDP. 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 2Y7.03%
EPS Next 3Y7.01%
34.59
+0.36 (+1.05%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner Change0.08%
Ins Owners1.01%
Ins Owner Change-23.95%
Market Cap46.93B
Analysts75
Price Target39.34 (13.73%)
Short Float %2.15%
Short Ratio1.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
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)4.41%
Min EPS beat(2)0.25%
Max EPS beat(2)8.57%
EPS beat(4)2
Avg EPS beat(4)1.84%
Min EPS beat(4)-0.91%
Max EPS beat(4)8.57%
EPS beat(8)6
Avg EPS beat(8)2.67%
EPS beat(12)7
Avg EPS beat(12)1.56%
EPS beat(16)8
Avg EPS beat(16)1.11%
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)1.63%
PT rev (3m)0.45%
EPS NQ rev (1m)-0.16%
EPS NQ rev (3m)-4.56%
EPS NY rev (1m)0.04%
EPS NY rev (3m)-0.61%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)-2.91%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.65 | ||
| Fwd PE | 15.73 | ||
| P/S | 3.02 | ||
| P/FCF | 26.42 | ||
| P/OCF | 20.03 | ||
| P/B | 1.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.91 |
EPS(TTM)1.96
EY5.67%
EPS(NY)2.2
Fwd EY6.36%
FCF(TTM)1.31
FCFY3.78%
OCF(TTM)1.73
OCFY4.99%
SpS11.44
BVpS18.02
TBVpS-14.17
PEG (NY)2.61
PEG (5Y)1.86
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
WACC7.28%
ROIC/WACC0.77
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 Y6.75%
EPS Next 2Y7.03%
EPS Next 3Y7.01%
EPS Next 5Y3.06%
Revenue 1Y (TTM)3.95%
Revenue growth 3Y6.57%
Revenue growth 5Y6.66%
Sales Q2Q%4.82%
Revenue Next Year5.48%
Revenue Next 2Y4.73%
Revenue Next 3Y4.45%
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%