What's not to like about a stock rising in heavy volume with a
dividend yield of 3.2% and annual return on equity and profit
margin at multi-year highs? That's what you have withDr Pepper
Snapple Group (
In addition to the company's flagship Dr Pepper and Snapple
brands, its portfolio also includes such popular brands as 7UP,
A&W, Sunkist soda, Canada Dry, Schweppes and Squirt, among
Earlier this month, the company inked a deal withBuffalo Wild
) that will bring Dr Pepper to all of Buffalo Wild Wings'
The stock just recently climbed above its all-time high of
50.37, set back in May. Big buyers have been coming into the
stock lately in spades. Heading into Tuesday, the stock showed
nine straight gains in above-average volume. So what's been
fueling the buying? A big earnings beat earlier this month had
something to do with it.
Earnings growth accelerated from the third quarter, rising 18%
to 97 cents a share, well above the Thomson/Reuters consensus
estimate of 85 cents a share. The results were less impressive on
the sales front. Revenue fell 1% from a year ago to $1.46
billion. Bottler case sales (
) fell 2% in the quarter, with both carbonated soft drinks and
noncarbonated beverages declining 2%.
Make no mistake. The beverage market remains challenging for
Dr Pepper Snapple Group and competitors such as Coke and Pepsi.
According to a recent report from Beverage Digest, per-capita
soda consumption in the U.S. has been slipping steadily since
1998 as consumers have turned to healthier lifestyles. That said,
Dr Pepper is trying to spur growth with a new lineup of
Ahead of its fourth-quarter results, the company raised its
quarterly dividend to 41 cents a share from 38 cents.
The dividend is payable on April 4 to shareholders of record