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Keurig's (KDP) Listing on Nasdaq to Attract More Investors

Zacks Equity Research
·3 mins read

Keurig Dr Pepper, Inc. KDP is about to be listed on the Nasdaq Stock Market later this month. The company is currently trading on the New York Stock Exchange. This latest move is seen as an important milestone for the beverage company as it will join the ranks of the largest companies on Nasdaq. This is among the various measures undertaken by the company to diversify its shareholder base.

Keurig Dr Pepper has a market cap of about $41.6 billion and will be among the top 50 companies trading on Nasdaq.

Further, its largest shareholder JAB Holdings B.V., which functions through its subsidiary Maple Holdings BV, will redistribute 76 million shares to minority partners — BDT Capital Partners, Quadrant Capital Advisors and the JCF Consumer Fund. This represents nearly 5.4% of Keurig Dr Pepper’s shares outstanding. Post the distribution, JAB and Maple will own 44% of Keurig Dr Pepper’s shares on a combined basis.

More About Keurig

The company is benefiting from strength across the Packaged Beverages and Coffee Systems businesses amid the coronavirus pandemic. Evidently, changes in consumers’ behavior influenced by stay-at-home orders, which are likely to persist until the pandemic subsides completely, have worked in its favor. Moreover, it witnessed strong in-market performance across most of the product categories — CSD's3, premium unflavored water, shelf stable fruit drinks, shelf stable vegetable juice and shelf stable apple juice and apple sauce. The upside was driven by strength in Dr Pepper and Canada Dry CSDs, CORE hydration and evian premium water, Snapple juice drinks, Clamato vegetable juice and Motts apple juice and apple sauce.

Encouragingly, management reiterated its guidance for 2020, driven by a solid product portfolio and a robust distribution network. The company expects net sales growth to be at the lower end of 3-4% for 2020. However, it anticipates adjusted earnings per share of $1.38-$1.40, which suggests growth of 13-15%. Aggressive cost-containment actions, productivity improvement plans and gains from partnerships are expected to aid 2020 results.

However, impacts of the coronavirus outbreak were felt across some segments, including fountain and foodservice business and office coffee business. Apart from these, unfavorable currency movements due to a strong U.S. dollar remain a deterrent.

In the past three months, shares of this Zacks Rank #3 (Hold) company have gained 1.2% compared with the industry’s growth of 3.8%.

3 Beverage Stocks You May Count on

The Boston Beer Company, Inc. SAM delivered a positive earnings surprise of 21.1%, on average, in the trailing four quarters. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Constellation Brands, Inc. STZ, with a Zacks Rank #2 (Buy) at present, has a long-term earnings growth rate of 10.2% in the last reported quarter.

Monster Beverage Company MNST has an expected long-term earnings growth rate of 12% and a Zacks Rank #2.

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