Dr Pepper Snapple Enters Licensing Agreement with Coca-Cola (DPS, KO)

By Dividend.com Staff,

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Beverage maker Dr Pepper Snapple Group Inc. ( DPS ) on Monday announced that is has entered into a licensing agreement with The Coca-Cola Company ( KO ) to distribute some of its products.

In pursuant to the deal, which is dependent on Coca-Cola's acquisition of its main bottler Coca-Cola Enterprises ( CCE ) , KO will also offer Dr Pepper and Diet Dr Pepper in local fountain accounts currently serviced by CCE.

Additionally, DPS will begin distributing certain Coke products in some markets.

DPS will receive a one-time cash payment of $715 million as part of the deal. Dr Pepper CEO Larry Young said in a statement that "These agreements build a strong foundation for the continued growth of Dr Pepper and our leading flavor brands … It solidifies Coke's support of the Dr Pepper trademark while enabling us to optimize our route-to-market by assuming distribution of several key brands. Additionally, we're increasing our fountain presence, enabling millions of consumers to sample our brands each day - a great win for Dr Pepper."

Dr Pepper Snapple shares fell 19 cents, or -0.5%, while Coca-Cola shares were mostly flat in premarket trading Monday.

The Bottom Line
Shares of DPS have a 2.74% dividend yield, based on Friday's closing stock price of $36.49.
Shares of KO have a 3.43% dividend yield, based on Friday's closing stock price of $51.27.

Dr Pepper Snapple Group Inc. ( DPS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. The Coca-Cola Company ( KO ) is a "recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Created by Dividend.com

This article appears in: Investing Stocks
Referenced Stocks: CCE , DPS , KO

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