Dr Pepper (DPS) Pouring Out Sweet Returns For Investors; Barron’s

Barron’s reports that Dr Pepper Snapple Group Inc. (NYSE: DPS) has become a favorite of investors. Shares of Dr Pepper, a manufacturer and distributor of non-alcoholic beverages in the U.S., Canada and Mexico, have climbed 150% in the last one year.

Even after this tremendous run, the stock has further potential, given it is still trading at a significant discount to its much bigger rivals The Coca-Cola Company (NYSE: K) and PepsiCo (NYSE: PEP). The stock is expected to rise a further 25%. The surge in shares of Dr Pepper has been mainly due to $8 per share windfall received by the company from changes in its bottling operations. Investors are expecting that some portion of this windfall will flow back to them and therefore are bullish about the company.

CLSA analyst, Caroline Levy, says, “The Pepper brand is a must-have soda. The company's broad portfolio of No. 1 or No. 2 share brands in [non-cola sodas] and juices puts it in a sweet spot.”