Dr Pepper Snapple Group Inc. ( DPS ) is the #3 beverage producer in the United States. After a solid performance in 2011, will DPS continue its growth, or will earnings fall flat?
Note: This 2012 preview for DPS appears in our new 275-page eBook,Beat the Market with Dividend Stocks, which is available exclusively for Dividend.com Premium members.
The best way to evaluate dividend stocks as we look ahead to 2012 is to separate the potential catalysts from the potential concerns. These are the main factors investors should weigh as they decide whether to put their hard-earned capital in any stock.
Potential Catalysts for DPS
- Company has been mentioned as a takeover play.
- Stock trading near all-time highs with little technical overhead resistance.
- Greeted investors with generous with dividend increases in its short time as a publicly-traded company.
Potential Concerns for DPS
- Could get boxed out by bigger competitors over time.
- Not anywhere near large enough to overtake the top two brands in the beverage space, Coca-Cola ( KO ) and PepsiCo ( PEP ).
The Bottom Line
DPS is a solid consumer play for dividend investors on pullbacks, but we wouldn't chase it if its yield falls below 3%.
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 views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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