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Dr Pepper Snapple Has Been Sweet To Investors In '14

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Dr Pepper Snapple Group has been a sweet deal to investors who have bought shares of the drink maker this year.

Dr Pepper Snapple ( DPS ) stock is up 25% so far, outpacing the S&P 500's 7% gain. Also, the firm pays a 2.7% dividend at the current share price, well above the S&P average 1.9%.

Dr Pepper Snapple, which traces its roots to 1885, owns more than 50 brands, including its namesake beverages plus 7UP, A&W, Canada Dry, Crush and Hawaiian Punch.

Profit growth in the past two quarters has been robust for such a mature, large-cap stock. Earnings rose 26% in the second quarter compared to the same period a year earlier, easily beating Wall Street estimates. The rise came on the heels of a 40% jump in Q1.

Revenue edged up 1%, beating views but continuing a long string of low single-digit sales gains.

Wells Fargo said after the report that weak revenue growth may make Dr Pepper's strong profit growth unsustainable, says stock news website Theflyonthewall.com. Wells Fargo also questioned whether the company is spending enough on marketing.

Analysts generally attribute the company's success thus far to cost-cutting efforts.

Nevertheless, Dr Pepper Snapple raised its full-year earnings outlook while holding its revenue growth forecast steady at 0% to 1%.

Dr Pepper Snapple has raised its dividend every year since being spun off from British confectioner Cadbury Schweppes in 2008. Its dividend growth rate is 17%.

The latest increase was announced in February, when the Plano, Texas-based company hiked the quarterly payout by 3 cents -- 7.9% -- to 41 cents a share, or $1.64 annually.

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

Dr Pepper Snapple is among the top stocks in the 17-member Beverages-Non-Alcoholic industry group, along withPepsiCo ( PEP ),Coca-Cola ( KO ) andMonster Beverage ( MNST ).

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


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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