Keurig Dr Pepper Inc's Dividend Analysis
Understanding the Dividend Profile of Keurig Dr Pepper Inc
Keurig Dr Pepper Inc (NASDAQ:KDP) recently announced a dividend of $0.22 per share, payable on 2024-04-12, with the ex-dividend date set for 2024-03-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Keurig Dr Pepper Inc's dividend performance and assess its sustainability.
What Does Keurig Dr Pepper Inc Do?
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Keurig Dr Pepper was established in 2018 following a merger between Keurig Green Mountain Coffee and Dr Pepper Snapple. The company manufactures and distributes coffee systems (including coffee brewers and single-serve coffee pods) under the Keurig and Green Mountain brands, as well as ready-to-drink beverages including flavored (non-cola) sparkling soft drinks under well-known brands such as Dr Pepper, Snapple, and Canada Dry. The company controls production and route to market for its own brands through in-house manufacturing plants and distribution infrastructure and leverages these facilities to manufacture and distribute for third-party coffee and beverage brands via licensing and partnership agreements. U.S. and Canada make up 95% of revenues, with the rest from Mexico.
A Glimpse at Keurig Dr Pepper Inc's Dividend History
Keurig Dr Pepper Inc has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Keurig Dr Pepper Inc's Dividend Yield and Growth
As of today, Keurig Dr Pepper Inc currently has a 12-month trailing dividend yield of 2.75% and a 12-month forward dividend yield of 2.84%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Keurig Dr Pepper Inc's annual dividend growth rate was 11.40%. Extended to a five-year horizon, this rate decreased to 1.90% per year. And over the past decade, Keurig Dr Pepper Inc's annual dividends per share growth rate stands at -11.00%. Based on Keurig Dr Pepper Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Keurig Dr Pepper Inc stock as of today is approximately 3.02%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Keurig Dr Pepper Inc's dividend payout ratio is 0.46.
Keurig Dr Pepper Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Keurig Dr Pepper Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Keurig Dr Pepper Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Keurig Dr Pepper Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Keurig Dr Pepper Inc's revenue has increased by approximately 8.80% per year on average, a rate that outperforms approximately 60.78% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Keurig Dr Pepper Inc's earnings increased by approximately 3.50% per year on average, a rate that outperforms approximately 37.63% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 9.20%, which outperforms approximately 59.09% of global competitors.
Concluding Insights on Keurig Dr Pepper Inc's Dividend Outlook
Keurig Dr Pepper Inc's consistent dividend payments, robust growth rate, manageable payout ratio, and strong profitability metrics paint a promising picture for value investors seeking reliable income streams. The company's ability to navigate market conditions while rewarding shareholders is indicative of its strategic operational efficiency and financial health. With a forward-looking approach, Keurig Dr Pepper Inc appears to be a contender for investors looking to infuse their portfolios with a blend of growth and income. Will Keurig Dr Pepper Inc continue its trend of increasing dividends, or will market dynamics prompt a reassessment of its dividend strategy? Only time will tell, but for now, the company's dividend profile is one to watch.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
