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Which Nonalcoholic Beverage Company Delivered Higher Returns?

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Dec. 4 2020, Updated 10:53 a.m. ET

Total return

As of March 11, 2016, Coca-Cola (KO) has delivered a total return of 6% on a year-to-date basis, which is higher compared to its peer group. PepsiCo (PEP), Dr Pepper Snapple (DPS), and Monster Beverage (MNST) have delivered total returns of 2.1%, -1.8%, and -10.1%, respectively, since the start of 2016.

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Dividends

In 2015, Coca-Cola paid an annual dividend of $1.32 per share, up 8.2% compared to the previous year. PepsiCo’s annual dividend in 2015 rose by 9.1% to $2.76 per share in 2015. Dr Pepper Snapple paid a dividend per share of $1.92 in 2015, a rise of 17.1% compared to the previous year. Monster Beverage currently does not pay any dividends.

As of March 11, Coca-Cola had a higher current dividend yield of 2.9% compared to PepsiCo and Dr Pepper Snapple, which had dividend yields of 2.7% and 2.1%, respectively. The SPDR S&P Dividend ETF (SDY) has 1.1% exposure to Coca-Cola.

Share repurchases

Share repurchases are another way of rewarding shareholders, as they enhance earnings per share by reducing the number of outstanding shares. In 2015, Coca-Cola made net share repurchases of $2.3 billion. PepsiCo and Dr Pepper Snapple repurchased shares worth $5 billion and $0.5 billion, respectively.

Dr Pepper Snapple expects to repurchase $650 million–$700 million worth of its common stock during 2016. In February 2016, Monster Beverage’s board authorized a share repurchase program of up to $1.8 billion. In addition, there is ~$250 million available under the previously authorized $500 million share repurchase program.

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