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 is valued correctly, but it does not seem to be growing.
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.
In the past 5 years KDP has always been profitable.
In the past 5 years KDP always reported a positive cash flow from operatings.
1.2 Ratios
KDP's Return On Assets of 2.80% is on the low side compared to the rest of the industry. KDP is outperformed by 62.50% of its industry peers.
The Return On Equity of KDP (6.15%) is comparable to the rest of the industry.
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.
The Average Return On Invested Capital over the past 3 years for KDP is significantly below the industry average of 11.57%.
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
With a decent Profit Margin value of 9.69%, KDP is doing good in the industry, outperforming 68.75% of the companies in the same industry.
KDP's Profit Margin has declined in the last couple of years.
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.
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.
The number of shares outstanding for KDP has been reduced compared to 1 year ago.
Compared to 5 years ago, KDP has less shares outstanding
KDP has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.46, we must say that KDP is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of KDP (1.46) is worse 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's Debt to FCF ratio of 9.45 is in line compared to the rest of the industry. KDP outperforms 43.75% 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.
KDP has a Debt to Equity ratio (0.64) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 9.45 | ||
| Altman-Z | 1.46 |
ROIC/WACC0.75
WACC7.43%
2.3 Liquidity
A Current Ratio of 0.47 indicates that KDP may have some problems paying its short term obligations.
With a Current ratio value of 0.47, KDP is not doing good in the industry: 84.38% of the companies in the same industry are doing better.
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: 84.38% 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%.
KDP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.49% yearly.
KDP shows a small growth in Revenue. In the last year, the Revenue has grown by 3.95%.
The Revenue has been growing slightly by 6.66% on average over the past years.
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 4.07% 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.
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
KDP is valuated rather expensively with a Price/Earnings ratio of 17.09.
Based on the Price/Earnings ratio, KDP is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
KDP is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 15.29 indicates a correct valuation of KDP.
Based on the Price/Forward Earnings ratio, KDP is valued cheaper than 81.25% of the companies in the same industry.
KDP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.09 | ||
| Fwd PE | 15.29 |
4.2 Price Multiples
KDP's Enterprise Value to EBITDA is on the same level as the industry average.
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 | 25.61 | ||
| EV/EBITDA | 14.73 |
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)2.37
PEG (5Y)1.8
EPS Next 2Y6.8%
EPS Next 3Y6.74%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.73%, KDP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.00, KDP pays a bit more dividend than its industry peers.
KDP's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
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.
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
80.25% of the earnings are spent on dividend by KDP. 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%
33.49
-0.16 (-0.48%)
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 Cap45.49B
Analysts77.6
Price Target40.16 (19.92%)
Short Float %1.63%
Short Ratio1.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
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 | 17.09 | ||
| Fwd PE | 15.29 | ||
| P/S | 2.93 | ||
| P/FCF | 25.61 | ||
| P/OCF | 19.41 | ||
| P/B | 1.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.73 |
EPS(TTM)1.96
EY5.85%
EPS(NY)2.19
Fwd EY6.54%
FCF(TTM)1.31
FCFY3.9%
OCF(TTM)1.73
OCFY5.15%
SpS11.43
BVpS18
TBVpS-14.16
PEG (NY)2.37
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 | 1.46 |
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 Y7.2%
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%