Hurt by slowing sales, soda makers are rushing to find sugar
substitutes as consumers increasingly shun highly sweetened
But flat revenue hasn't affected one drink maker's stock.
Shares ofDr Pepper Snapple Group (
) have been trading at or near new-high ground since
mid-February, when they cleared a long base in heavy trade.
The Plano, Texas-based company on Feb. 12 reported Q4 EPS that
topped views by a wide margin, though sales slipped 1%. In the
earnings conference call, CEO Larry Young addressed the head
winds the carbonated soft drinks category faces.
Bottler case sales in Q4 were flat to lower in most of its
brands, which include 7UP, Crush and Canada Dry. Snapple sales
grew 3%. For the year, Snapple and Mott's outperformed.
The beverage maker has been making a push with offerings such
as Aloha Morning, a 40%-less-sugar version of Hawaiian Punch, and
a Mott's juice line with 40% less sugar and no artificial
It's now test-marketing Snapple Straight Up Tea in response to
consumers' request for a less-sweet tea. Also up for
test-marketing soon is a proprietary sugar-Stevia blend to be
used in some of its drinks.
) is testing a similar blend, whilePepsiCo (
) is set to sell drinks sweetened with Sweetmyx as early as this
year, after the Food and Drug Administration on Tuesday approved
)-developed sweetener enhancer. PepsiCo has exclusive
to use it in nonalcoholic beverages.
Dr Pepper last month raised its quarterly dividend by 8% to 41
cents a share, for an annualized yield of 3.1%. It's increased
its payout each year, starting with 15 cents in 2009. The S&P
500's average yield is 1.87%.
Steady earnings-per-share growth the past four years helps it
earn an 84 EPS Rating and a 3-year Earnings Stability Factor of 2
on a scale of 0 (most stable) to 99 (least stable). Analysts see
gains of 6% this year and next.