Dr Pepper Snapple Group (DPS) has a market cap of $17.0 billion. It fell by 1.1% to close at $91.37 per share on June 17, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.92%, 0.05%, and -0.83%, respectively, that day. This means that DPS is trading 0.27% below its 20-day moving average, 0.40% above its 50-day moving average, and 3.8% above its 200-day moving average.
Related ETFs and peers
The PowerShares Dynamic Food & Beverage Portfolio ETF (PBJ) invests 3.0% of its holdings in Dr Pepper Snapple. The ETF tracks a multifactor, tiered, and equal-weighted index of US food industry stocks. The YTD price movement of PBJ was 1.3% on June 17, 2016.
The Fidelity MSCI Consumer Staples ETF (FSTA) invests 0.84% of its holdings in Dr Pepper Snapple. The ETF tracks a market-cap-weighted index of stocks in the US consumer staples sector.
The market caps of DPS’s competitors are as follows:
Philadelphia city issues soda tax
Dr Pepper Snapple Group fell by 1.1% on June 17, 2016, after Philadelphia’s city council issued a soda tax of 1.5 cents per ounce on sweetened beverages. The city becomes the largest and second US city to pass the tax.
Dr Pepper Snapple’s 1Q16
Dr Pepper Snapple reported 1Q16 net sales of $1.48 billion, a rise of 2.5% from 1Q15’s $1.45 billion. Its beverage concentrate and packaged beverage sales rose by 0.70% and 4.2%, respectively, and its Latin American beverage sales fell by 8.8% between 1Q15 and 1Q16.
The company’s cost of sales as a percentage of net sales fell 2.4%. Its income from operations rose 15.9% between 1Q15 and 1Q16.
In 1Q16, its net income and EPS (earnings per share) rose to $182.0 million and $0.96, respectively, compared with $157.0 million and $0.81 in 1Q15.
DPS’s cash and cash equivalents fell 69.8% and its inventories rose 12.4% between 4Q15 and 1Q16. In 1Q16, its current ratio and debt-to-equity ratio fell to 1.1x and 3.0x, respectively, from 1.2x and 3.1x in 4Q15.
The company has made the following projections for 2016:
- net sales growth of ~2%
- core EPS in the range of $4.20–$4.30
- packaging and ingredient costs to decrease the cost of goods sold by ~0.5% on a constant volume and mix basis
- a core tax rate of ~35.5%
- capital spending of ~3% of net sales
- the repurchase of $650 million–$700 million in common stock
Foreign currency and transactions are expected to hurt the company’s net sales by ~1% and its core EPS growth by ~2.5%. In the next part of this series, we’ll look at Pinnacle Foods.