Dr Pepper Snapple Posts Strong Stock, Dividend Growth

By
A A A

The shareholders ofDr Pepper Snapple Group ( DPS ) have enjoyed strong capital gains to go with a steadily rising dividend.

The stock is up 22% this year, far outpacing the S&P 500's 7% increase. Furthermore, the company has raised its dividend every year since being spun off from British confectioner Cadbury Schweppes in 2008. Its three- to five-year dividend growth rate is 17%.

The latest increase was announced in February, when the Plano, Texas-based company hiked the quarterly payout by 7.9% to 41 cents a share, or $1.64 annually.

That works out to an annual dividend yield of 2.8% at the current share price, a nice premium to the S&P's average of 1.9%.

Dr Pepper Snapple, whose roots go back to 1885, owns more than 50 brands.

They include its namesake beverages as well as 7UP, A&W, Canada Dry, Crush and Hawaiian Punch.

As with many well-established companies, profit growth has been slow but steady.

The stock's five-year Earnings Stability Factor is 5 on a scale of 0 (most stable) to 99 (least stable).

Dr Pepper Snapple will report Q2 earnings before the market opens July 24. Analysts expect profit to rise 7% from the same period last year to 90 cents a share. That's down from Q1's 40% jump, which was much better than expected.

Profit for the full year is forecast to rise 8%, just shy of the company's three-year annualized EPS growth rate of 9%.

Revenue has alternated from 1% gains to 1% declines the past four quarters.

Q2 is expected to be no different, with revenue rising 1% to $1.62 billion.

Dr Pepper Snapple cleared a flat base in heavy volume on Feb. 12 and is testing support at the 10-week line for the second time since the breakout. While that normally puts the stock in a follow-on buy area, investors should be cautious now that the market's uptrend has come under pressure.



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



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: DPS

Investor's Business Daily

Investor's Business Daily

More from Investor's Business Daily:

Related Videos

Cheap Ways to Sleep Better
Cheap Ways to Sleep Better          

Stocks

Referenced

100%

Most Active by Volume

105,679,298
  • $16.13 ▼ 0.19%
43,130,824
  • $101.32 ▲ 0.74%
24,108,376
  • $59.80 ▲ 7.34%
22,524,427
  • $26.15 ▼ 1.06%
22,194,114
  • $24.65 ▼ 0.96%
21,835,360
  • $99.05 ▲ 0.15%
20,872,575
  • $34.94 ▼ 0.60%
20,561,803
    $74.57 unch
As of 8/22/2014, 04:02 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com