Money and Finance
Earnings season is in full swing and with each new release comes some more data points on both past and future results. On February 12th management at Dr. Pepper Snapple Group, Inc. (DPS) announced 4Q 2013 and full year results. Last week I looked through both The Coca-Cola Company's earnings report as well as PepsiCo, Inc. So why not go for the trifecta an get the third major player in the domestic soda market; and tear through Dr. Pepper Snapple Group's report and update their valuation. On Friday, February 21st, Dr. Pepper Snapple Group closed trading at $51.74 giving a forward dividend yield of 3.17%.
DCF Valuation:
Analysts followed by Yahoo!Finance expect Dr. Pepper Snapple to grow earnings 6.90% per year over the next five years and I've assumed they can grow at 5.18% (75% of 6.90%) for the next 3 years and at 4.50% per year thereafter. Running these numbers through a three stage DCF analysis with a 10% discount rate and summing over 30 years yields a fair value price of $59.36. This means the shares are trading at a 12.8% discount to the discounted cash flow analysis.
Click here to read the rest of the analysis.
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Money and Finance
Is There Value In Dr. Pepper Snapple Group Inc.?
Earnings season is in full swing and with each new release comes some more data points on both past and future results. On February 12th management at Dr. Pepper Snapple Group, Inc. (DPS) announced 4Q 2013 and full year results. Last week I looked through both The Coca-Cola Company's earnings report as well as PepsiCo, Inc. So why not go for the trifecta an get the third major player in the domestic soda market; and tear through Dr. Pepper Snapple Group's report and update their valuation. On Friday, February 21st, Dr. Pepper Snapple Group closed trading at $51.74 giving a forward dividend yield of 3.17%.
DCF Valuation:
Analysts followed by Yahoo!Finance expect Dr. Pepper Snapple to grow earnings 6.90% per year over the next five years and I've assumed they can grow at 5.18% (75% of 6.90%) for the next 3 years and at 4.50% per year thereafter. Running these numbers through a three stage DCF analysis with a 10% discount rate and summing over 30 years yields a fair value price of $59.36. This means the shares are trading at a 12.8% discount to the discounted cash flow analysis.
Click here to read the rest of the analysis.
- Is Family Dollar Stores, Inc. A Bargain?
I'm always on the lookout for new to me dividend growth companies and recently received a request to do a full analysis on Family Dollar Stores, Inc. (FDO). What was really surprising is that Family Dollar Stores has a 38 year history of increasing...
- How Yummy Is Yum Brands' Valuation?
Last week I updated my valuation of McDonald's Corporation (MCD) and the price appears to offer a decent value. You can read the full analysis here. As more of a growth play I wanted to take a look at its largest competitor YUM! Brands,...
- U.s. Beverage Valuation Wrap Up
Throughout February we had fourth quarter and full year earnings releases from the three major players in the non-alcoholic beverage industry. As the new data points rolled in I figured it was time to update the valuations on the Coca-Cola Company (KO),...
- Valuation Of Pepsico Inc. - The Long Case Looks Strong
Last week management of PepsiCo. Inc. (PEP) announced earnings for 4Q and full year 2013. The results were fairly mixed with revenue increasing around 1% over 2012. North American soda consumption continues to be a drag on the growth of the...
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The Coca-Cola Company (KO) will be announcing earnings on Tuesday, so what better time than the present to get an update on its current valuation. There's not much needed to be said about a company as great as Coca-Cola. It has the number...