Keurig Dr Pepper

Methodology

Keurig Dr Pepper's beverage business generates relatively stable earnings from coffee systems and soft drink brands, though the company faces competitive intensity and changing consumer preferences. The Keurig system's installed base creates recurring K-Cup revenue. This calculation works moderately well, though the mature soft drink market and single-serve coffee competition create modest growth challenges.

Methodology

Keurig Dr Pepper often shows moderate PEG ratios reflecting steady but unspectacular growth in mature beverage categories. The company's Keurig razor-razorblade model provides some defensibility. Compare to other beverage companies to assess whether KDP's single-serve coffee franchise and regional soft drink brands justify valuations relative to larger global beverage peers.

Methodology

Keurig Dr Pepper pays a meaningful dividend reflecting steady cash generation from beverage sales. The company prioritizes debt reduction from the merger while maintaining dividend commitment. PEGY is relevant for income investors, though dividend growth will be constrained until leverage targets are achieved and the company demonstrates consistent organic growth.