Dr Pepper Snapple Group Hits 52-Week High - Analyst Blog

On Apr 28, 2014, shares of Dr Pepper Snapple Group Inc. DPS reached a 52-week high of $55.59, eventually closing at $55.40. The closing price represents a year-to-date return of around 17.1%.

Share Price Drivers

Share price of Dr Pepper Snapple has been rising ever since it reported solid first quarter 2014 results on Apr 23. Dr Pepper Snapple beat the Zacks Consensus Estimate for both revenues and earnings in the quarter.
 
Adjusted earnings of 74 cents per share increased 40% year over year on the back of strong margins and solid revenues.

Revenues of $1.40 billion also beat the Zacks Consensus Estimate by 1.5% and the year-ago level by 1% on the back of improving sales volumes, price increases and favorable product/package mix, offset by unfavorable foreign translations and segment mix.

Dr Pepper rebounded in the quarter with stronger volumes in most of the segments. Sales volume was up 1% in the quarter driven by 2% volume gain in the Latin American segment and a 3% volume gain in Beverage Concentrates.

In addition, profits improved significantly during the quarter. Reported gross margins grew 320 basis points and operating margins grew 290 basis points driven by productivity improvements and lower marketing and people-related expenses.

Dr Pepper has sound long-term fundamentals and a strong position in the flavored CSD market. It is reducing costs and regularly returning cash to shareholders.

Dr Pepper's carries a Zacks Rank #2 (Buy).

Other companies worth considering in the consumer goods sector include Coca-Cola Amatil Ltd. (CCLAY) with a Zacks Rank #1 (Strong Buy) and Coca-Cola Enterprises Inc. CCE and Monster Beverage Corp. MNST with a Zacks Rank #2.