Shares of Dr Pepper Snapple Group (DPS) reached a 52-week high of $46.45 on Friday, Mar 22, 2013, after it paid its increased quarterly dividend for the first quarter of 2013 on Mar 13.
The closing price of the beverage company on Mar 22, 2013, was $46.42, representing a solid one-year return of about 23.6% and year-to-date return of about 2.8%. Average volume of shares traded over the last 3 months stands at approximately 2212K.
Upped Dividend Rate
At its fourth-quarter conference call in February, DPS increased its quarterly dividend by almost 12.0% to 38 cents from 34 cents. This is an annual dividend to $1.52 per share for 2013, resulting in a current dividend yield of 3.3%. This marks Dr Pepper’s 5th dividend increase since it became public.
Expanding International Presence
The stock also gained momentum from its deal to buy back distribution rights for several of its brands for certain parts of Asia-Pacific from snack company, Mondelez International, Inc. (MDLZ).
Dr Pepper lacks significant exposure outside the U.S. DPS mainly operates its business in the U.S., Canada and Mexico, which are experiencing saturation. It thus lacks exposure in the fast emerging markets where demand is growing and health consciousness is comparatively less than the western countries. This is a significant competitive disadvantage for Dr Pepper versus its peers like The Coca Cola Company (KO) and PepsiCo, Inc. (PEP), which are fast expanding and exploring markets outside the U.S. Deals like the above will help Dr Pepper gain foothold in a growing market and thereby increase the popularity of its brands outside the U.S.
Dr Pepper carries a Zacks Rank #3 (Hold).
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