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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Keurig Dr Pepper Inc. (XNAS:KDP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
KDP
Name:
KEURIG DR PEPPER INC. (XNAS:KDP)
Sector:
544.00M
Industry:
Beverages�Non-Alcoholic
CEO:
Mr. Robert Gamgort
Total Employees:
27,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -699.33% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF KEURIG DR PEPPER INC.(KDP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BEVERAGES�NON-ALCOHOLIC INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
37.83
One Month Price Target:
$37.97
Six Month Price Target :
$38.66
Likely Price in One Year's Time:
Ticker:
$39.48
Likely Trading Range Today Under (Normal Volatility)
$37.74
Price Upper limit ($) :
$37.96
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$36.51
This week:
$34.87
This month :
$31.91
Other Primary facts
Market Cap:
53.20B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.42B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.15%
-16.49%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$43.97
$41.13
$31.69
$34.53
Medium risk (<10%) entry points
Buy Call
Sell Call
$40.21
Buy Put:
Sell Put:
$39.60
$35.44
$36.06
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
KDP
Sharpe Ratio:
2.63%
Comparison:
KDP, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -34.85% lower than the industry
& ratio is 15.27% higher than the market/S&P 500 average
Average Returns/Yield of
KDP
Daily returns:
0.05%
Weekly returns:
0.27%
Monthly returns:
1.09%
Yearly returns:
36.41%
Comparison of returns:
Average annual returns/yield (last 3 years) is -64.18% below industry average
Classification:
KDP, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.89
Statistical test of Returns:
KDP has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.73%
Weekly Volatility:
3.87%
Monthly Volatility:
7.74%
Yearly Volatility:
26.83%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.82%
Volatility in last five trading days has been -52.91% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.50%
Weekly VaR:
-7.83%
Monthly VaR:
-15.66%
How Much Can the price of
KDP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-13%
Worst case (decline):
-54.25%
This translates to price declining to:
$32.83
This translates to price declining to:
$17.31
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
KDP is a 10.53% riskier investment compared to the market/S&P 500 & is -5.31% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -34.08% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
KDP
Beta in relation to market/S&P 500--0.65
Expected beta in 1 year's time:
0.609
Expected beta in 3 year's time:
0.861
Unlevered (debt free) Beta:
0.47
Beta in relation to Nasdaq (XNAS):
0.437
Beta in relation to all global stocks::
0.491
Beta Comparison & Analysis
Beta of competitors/peers::
0.708
Beta is -8.04% lower than peers
Average Industry Beta:
0.913
Beta is -28.69% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.98%
Sustainable growth rate is -81.54% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.054
Alpha is -79.88% below industry average alpha yield
Alpha is 346% higher than market/& is unsustainably high
Analysis of Cost of Capital of
KDP
Equity cost of capital:
0.076
Equity cost of capital is -19.08% below industry mean WACC
Unlevered (without debt) cost of capital:
5.49%
Before-tax cost of debt:
4.18%
After-tax cost of debt:
3.30%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.30%
WACC is -20.42% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.08
Revenue growth rate per share of (3Y):
2.1
Annual revenue growth rate is -55.62% below industry average
EPS:
$1.68
Expected Annual growth rate of EPS (3Y):
-2.69%
Expected future EPS growth rate is -113.64% lower than the Beverages�Non-Alcoholic industry
Free cash flow (FCF) per share:
$1.75
Balance sheet equity growth per share: 215.86%
Equity growth rate per share is 177.54% higher than the industry
Debt per share
$9.13
EBITDA per share
$3.13
Valuation Analysis Today of
KDP
P/E Ratio:
24.8
P/E Ratio of Competitors/Peers:
23.54
P/E ratio is 5.33% higher than main peers & is -79.70% lower than the industry
Stock price/value with industry average P/E ratio: $205.21
KDP is -81.57% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $37.78
Present value of the expected future dividends only: $15.11
P/S (Price to Sales ratio):
4.17
Price to sales ratio is -34.50% below the industry mean
P/B (Price to book value ratio):
2.1
Price to free cash flow: 21.66
Price to free cash flow ratio is 215.29% higher than the industry
Net income growth rate (3Y):
181.00%
Net income growth rate is -237.94% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.01%
Dividend yeild: 1.99%
Previous Dividend: $0.19
Previous adjusted dividend: $0.19
Previous Dividend: $0.75
Expected next dividend best case: $0.20
Expected next dividend worst case: $0.17
Average dividend payment (long-term): $0.17
Average dividend increase/decrease (growth rate) % per period: 2.51%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 29/09/2022
Expected next dividend declaration date: 17/08/2022
Previous dividend payment date: 15/07/2022
Previous dividend record date: 07/01/2022
Previous dividend declaration date: 19/05/2022
Dividend History:
2022-06-30--$0.19
2022-01-05--$0.19
2021-06-30--$0.19
2022-03-31--$0.19
2021-09-30--$0.19
2021-03-31--$0.15
Dividend growth rate is 111.41% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
50.70%
Net debt to equity ratio:
49.06%
Debt to assets ratio:
25.24%
Net debt to assets ratio:
24.42%
Debt-to-asset ratio is -51.82% below industry average
Ability to repay debt:
Interest coverage ratio:
8.08
Interest coverage ratio is -215.80% less than industry average
Looking forward:
Debt growth rate:
-8.40%
Annual debt growth is 349% higher than industry average debt growth rate
Debt repayment rate in last quarter: 2.78%
Analysis of Key Statistics
Correlation of price movement with the market:
0.499
Statistical significance of correlation:
KDP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is -7.62% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
0.012
Covariance of price movement with the market:
0.012
Kurtosis
50.71
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.643
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
KDP
Gross Profit Margin Ratio:
219%
Operating Profit Margin Ratio:
25.04%
Operating profit margin is 73.43% higher than the industry
Net Profit Margin Ratio:
219%
Effective Tax Rate:
24.01%
Effective tax rate is 22.89% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.43%
Return on equity (ROE) is -69.73% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.70%
Return on assets (ROA) is -58.50% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
0.54
Current ratio is -73.68% below industry average
Cash Conversion Cycle (days):
-228.9
Cash conversion cycle is -353.26% below industry average
The remaining useful life of property plant & equipment is: 1.0 years
Stock based compensation to net income ratio:
-0.62%
In-depth Efficiency Analysis
Revenue generated per employee:
467.6K
Each employee generates -46% less revenue than industry average revenue per employee
EBITDA generated per employee:
161.1K
Each employee generates -6% less EBITDA than industry average revenue per employee
Profit generated per employee:
87.5K
Each employee generates -26% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
19.8K
Each employee generates -13% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.7M
Each employee generates -13% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
KDP
DOLLAR GENERAL CORPORATION (XNYS:DG)
Ambev SA (XNYS:ABEV)
CONSTELLATION BRANDS, INC. (XNYS:STZ)
KIMBERLY-CLARK CORPORATION (XNYS:KMB)
SYSCO CORPORATION (XNYS:SYY)
GENERAL MILLS, INC. (XNYS:GIS)
ARCHER-DANIELS-MIDLAND COMPANY (XNYS:ADM)
BF-A
BF-B
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
12.86B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.83B
7.03B
-
-
4.21B
-
- 104000.00K
4.11B
-
548.00M
715.00M
4.43B
3.22B
2.41B
3.17B
760.00M
2.41B
Statement of Cash Flow
Date:
Period:
182.00M
Differed Income Tax :
8.00M
Stock Based Compensation :
- 15000.00K
Change in Working Capital :
- 80000.00K
Accounts Receivables:
- 73000.00K
Other Working Capital:
135.00M
Other Non-Cash Items:
- 17000.00K
Net Cash Provided by Operating Activities:
663.00M
Investments in PP&E:
- 109000.00K
Net Acquisitions:
47.00M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
592.00M
-
592.00M
1.36B
1.05B
495.00M
3.49B
3.25B
20.24B
23.89B
80.00M
38.00M
259.00M
47.75B
-
51.24B
4.51B
174.00M
282.00M
-
1.76B
6.45B
12.93B
297.00M
19.29B
-
25.73B
14.00M
3.52B
215.0M
21.76B
March 31, 2022 at 6:00:00 AM
9.94B
25.51B
51.24B
-
13.11B
12.5B
-
65.00M
3.00M
- 370000.00K
-
-
- 265000.00K
- 9000.00K
- 644000.00K
4.00M
26.00M
594.00M
568.00M
663.00M
- 119000.00K
544.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
KDP
2023
2024
2025
2026
2027
$44.43
$46.38
$48.40
$50.52
$52.73