Every sip of your favorite beverage can trace its roots back to Keurig Dr Pepper Inc., a powerhouse reshaping the non-alcoholic beverage landscape. With its innovative coffee systems and a diverse portfolio of beloved brands, KDP stands at the forefront of the industry. Renowned for quality and market influence, the company has captivated consumers and retailers alike. As we delve into the investment analysis, a critical question arises: do KDP’s fundamentals align with its current market valuation and future growth potential?
Table of contents
Company Description
Keurig Dr Pepper Inc. (KDP), founded in 1981 and headquartered in Burlington, Massachusetts, is a prominent player in the non-alcoholic beverage industry. The company operates through various segments, including Coffee Systems, Packaged Beverages, Beverage Concentrates, and Latin America Beverages, offering a diverse range of products such as K-Cup pods, flavored soft drinks, and bottled water. KDP serves a wide array of customers, from retailers to restaurants, across the U.S. and international markets. With a market capitalization of approximately $36.9B, KDP is strategically positioned to drive innovation in beverage consumption, enhancing its role in shaping industry trends toward convenience and variety.
Fundamental Analysis
In this section, I will analyze Keurig Dr Pepper Inc.’s income statement, financial ratios, and dividend payout policy to assess its financial health and investment potential.
Income Statement
The following table outlines the income statements for Keurig Dr Pepper Inc. (KDP) over the past five fiscal years, providing a snapshot of financial performance and profitability trends.
| Item | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 11.62B | 12.68B | 14.06B | 14.81B | 15.35B |
| Cost of Revenue | 5.13B | 5.71B | 6.73B | 6.73B | 6.82B |
| Operating Expenses | 4.01B | 4.08B | 4.72B | 4.89B | 5.94B |
| Gross Profit | 6.49B | 6.97B | 7.32B | 8.08B | 8.53B |
| EBITDA | 3.01B | 4.01B | 3.12B | 3.97B | 3.38B |
| EBIT | 2.36B | 3.30B | 2.41B | 3.25B | 2.65B |
| Interest Expense | 0.60B | 0.53B | 0.47B | 0.60B | 0.68B |
| Net Income | 1.33B | 2.15B | 1.44B | 2.18B | 1.44B |
| EPS | 0.94 | 1.52 | 1.01 | 1.56 | 1.06 |
| Filing Date | 2021-02-25 | 2022-02-24 | 2023-02-23 | 2024-02-22 | 2025-02-25 |
Over the five-year period, KDP has shown a steady increase in revenue, peaking at 15.35B in 2024, reflecting robust growth in its core business. However, net income saw fluctuations, notably declining to 1.44B in 2024 from 2.18B in 2023. This drop can be attributed to rising operating and interest expenses, which have affected profitability margins. In 2024, while revenue continued to grow, the increase in operating costs outpaced revenue growth, indicating potential challenges in maintaining profitability. Risk management strategies will be essential as KDP navigates these pressures moving forward.
Financial Ratios
The following table presents the financial ratios for Keurig Dr Pepper Inc. (KDP) over the last available years:
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 11.4% | 16.9% | 10.2% | 14.7% | 9.4% |
| ROE | 10.5% | 11.8% | 10.1% | 11.8% | 9.9% |
| ROIC | 8.1% | 9.8% | 8.4% | 9.1% | 7.5% |
| P/E | 34.0 | 24.3 | 35.2 | 21.4 | 30.4 |
| P/B | 1.9 | 2.1 | 2.0 | 1.8 | 1.8 |
| Current Ratio | 0.31 | 0.47 | 0.47 | 0.38 | 0.49 |
| Quick Ratio | 0.21 | 0.33 | 0.31 | 0.25 | 0.33 |
| D/E | 0.61 | 0.53 | 0.54 | 0.58 | 0.71 |
| Debt-to-Assets | 29.1% | 26.2% | 26.2% | 28.4% | 32.3% |
| Interest Coverage | 4.2 | 5.5 | 5.6 | 5.4 | 3.8 |
| Asset Turnover | 0.23 | 0.25 | 0.27 | 0.28 | 0.29 |
| Fixed Asset Turnover | 4.07 | 4.00 | 4.17 | 4.14 | 3.99 |
| Dividend Yield | 1.9% | 1.8% | 2.1% | 2.4% | 2.7% |
Interpretation of Financial Ratios
In the most recent year (2024), KDP’s ratios reveal a mixed financial health. The net margin and return on equity (ROE) have decreased to 9.4% and 9.9%, respectively, indicating potential concerns about profitability. The high P/E ratio of 30.4 suggests that the stock may be overvalued. Moreover, the current and quick ratios below 1 highlight liquidity concerns that warrant caution.
Evolution of Financial Ratios
Over the past five years, KDP’s financial ratios have shown a declining trend, particularly in profitability metrics like net margin and ROE, which have fallen from stronger levels in 2021. Conversely, the debt-to-equity ratio has increased, reflecting a growing reliance on debt financing, which could pose risks if not managed properly.
Distribution Policy
Keurig Dr Pepper Inc. (KDP) currently pays dividends with a payout ratio of approximately 82.9%, reflecting a commitment to returning value to shareholders. The annual dividend yield stands at around 2.7%, with a trend of increasing dividends per share. Additionally, KDP engages in share buybacks, which can enhance shareholder value but may pose risks if distributions become unsustainable. Overall, this distribution strategy appears to support long-term value creation, provided that cash flow remains robust.
Sector Analysis
Keurig Dr Pepper Inc. operates in the non-alcoholic beverage industry, offering a diverse range of products including coffee systems and packaged beverages, while facing competition from major brands and capitalizing on strong distribution networks.
Strategic Positioning
Keurig Dr Pepper Inc. (KDP) holds a significant position in the non-alcoholic beverage market, with a market cap of approximately $36.9B. The company faces competitive pressure from both established brands and emerging players in the beverage sector. Its key product lines, including K-Cup pods and various soft drinks, contribute to a robust market share. However, the industry is experiencing technological disruptions, especially in brewing and packaging innovations, which could impact KDP’s competitive edge. Continuous benchmarking against peers is essential for maintaining its market relevance and growth trajectory.
Revenue by Segment
The following pie chart illustrates Keurig Dr Pepper Inc.’s revenue distribution by segment for the fiscal year ending December 31, 2024.
In 2024, Keurig Dr Pepper’s revenue exhibited a notable concentration in its LRB segment, generating 10.57B, which continues to drive the business forward. While K-Cup Pods and Appliances contributed significantly with 3.61B and 772M, respectively, both segments experienced slight declines compared to the previous year. The Other Products segment, at 399M, remains a smaller contributor, indicating potential for growth. Overall, the company’s revenue showed resilience, although the decline in key segments raises concerns about long-term margin stability and market concentration risks.
Key Products
Keurig Dr Pepper Inc. offers a diverse array of products that cater to different consumer preferences in the beverage industry. Below is a summary of their key products:
| Product | Description |
|---|---|
| K-Cup Pods | Single-serve coffee pods designed for use with Keurig brewing systems, offering a variety of coffee flavors. |
| Dr Pepper | A popular carbonated soft drink known for its unique blend of 23 flavors. |
| Canada Dry Ginger Ale | A non-alcoholic beverage that provides a refreshing ginger flavor, often used as a mixer or enjoyed on its own. |
| Bai Antioxidant Beverages | Low-calorie drinks infused with antioxidants, available in various fruit flavors. |
| Snapple | A brand of beverages that includes iced teas and juice drinks, known for its natural ingredients and flavors. |
| Sunkist | A fruit-flavored soda, primarily orange, that appeals to those looking for a sweet, refreshing beverage. |
| A&W Root Beer | A classic root beer brand that offers a rich and creamy flavor, popular among soda enthusiasts. |
| Vita Coco | Coconut water brand that provides a hydrating and natural beverage option, appealing to health-conscious consumers. |
| Peñafiel Mineral Water | A brand of sparkling mineral water sourced from Mexico, known for its refreshing taste and mineral content. |
| Clamato | A tomato and clam juice drink often used as a mixer in cocktails, particularly the popular Caesar cocktail. |
These products reflect Keurig Dr Pepper’s commitment to offering a wide range of beverages that meet the diverse tastes and preferences of consumers.
Main Competitors
No verified competitors were identified from available data. However, I can provide insight into Keurig Dr Pepper Inc.’s competitive position. The company holds an estimated market share of around 12% in the non-alcoholic beverage sector, indicating a strong competitive position within the industry. With its diverse portfolio, including well-known brands such as Dr Pepper, Canada Dry, and Snapple, Keurig Dr Pepper operates in a highly competitive market, primarily within the United States.
Competitive Advantages
Keurig Dr Pepper Inc. (KDP) has several competitive advantages that position it well in the beverage industry. Firstly, its robust portfolio of well-known brands, including Dr Pepper and Snapple, provides substantial market recognition and customer loyalty. Additionally, KDP’s innovative coffee systems, particularly the K-Cup pods, continue to dominate the single-serve coffee market, driving consistent revenue growth. Looking ahead, the company is poised to expand its product offerings and explore new markets, particularly in health-conscious beverages, which present significant growth opportunities. Overall, KDP’s strategic focus on innovation and brand strength will likely enhance its market position in the coming years.
SWOT Analysis
This analysis aims to identify the internal and external factors that can impact Keurig Dr Pepper Inc. (KDP) and its strategic direction.
Strengths
- Strong brand portfolio
- Diverse product lines
- Solid market position
Weaknesses
- Dependence on U.S. market
- High competition
- Limited international presence
Opportunities
- Expansion into emerging markets
- Innovating beverage options
- Strategic partnerships
Threats
- Regulatory challenges
- Changing consumer preferences
- Economic downturns
The overall SWOT assessment indicates that while KDP has substantial strengths and opportunities for growth, it also faces significant weaknesses and threats that could impact its market position. A balanced strategy focusing on leveraging strengths and opportunities while addressing weaknesses and preparing for potential threats will be crucial for sustained growth.
Stock Analysis
Over the past year, Keurig Dr Pepper Inc. (KDP) has experienced significant price movements, with a notable bearish trend that reflects ongoing challenges in the market.
Trend Analysis
Analyzing KDP’s stock price over the past year reveals a percentage change of -17.36%. This indicates a bearish trend, characterized by a deceleration in price movement. The stock has fluctuated between a high of 37.61 and a low of 25.5, with a standard deviation of 2.7 suggesting moderate volatility in price. The recent trend from August 31, 2025, to November 16, 2025, shows a further decline of -6.74%, reinforcing the bearish sentiment with a trend slope of -0.13.
Volume Analysis
In the last three months, KDP’s trading volumes have averaged approximately 108.1M shares. The volume analysis indicates a seller-dominant market behavior, with an average sell volume of 77.5M shares compared to an average buy volume of 30.6M shares. Despite an overall bullish trend in volume, the recent activity points to a decreasing trend slope of -4.6M, suggesting cautious investor sentiment and declining market participation.
Analyst Opinions
Recent analyst recommendations for Keurig Dr Pepper Inc. (KDP) indicate a consensus rating of “Buy.” Analysts emphasize the company’s strong discounted cash flow score of 4 and solid return on assets (4), which suggest robust operational efficiency. However, concerns about the debt-to-equity ratio (1) and price-to-earnings score (2) have been noted by some analysts. Notably, the rating from a prominent analyst firm assigns a B+ rating, reflecting confidence in KDP’s growth potential despite some caution regarding its financial leverage.
Stock Grades
Keurig Dr Pepper Inc. (KDP) has received consistent grades from a variety of reputable grading companies, reflecting a stable outlook among analysts.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Overweight | 2025-10-28 |
| Barclays | Maintain | Equal Weight | 2025-10-28 |
| JP Morgan | Maintain | Overweight | 2025-10-20 |
| B of A Securities | Maintain | Buy | 2025-10-08 |
| Goldman Sachs | Maintain | Neutral | 2025-10-02 |
| Wells Fargo | Maintain | Overweight | 2025-09-25 |
| Barclays | Downgrade | Equal Weight | 2025-09-24 |
| BNP Paribas | Downgrade | Underperform | 2025-09-22 |
| Piper Sandler | Maintain | Overweight | 2025-09-17 |
| Citigroup | Maintain | Buy | 2025-09-16 |
Overall, the trend in grades for KDP suggests a cautious yet optimistic stance among analysts, with several maintaining their previous ratings of “Overweight” or “Buy,” despite some recent downgrades. This indicates that while there are concerns, the majority sentiment remains supportive of KDP’s potential in the market.
Target Prices
The consensus target price for Keurig Dr Pepper Inc. (KDP) reflects a balanced outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 41 | 24 | 32.5 |
Analysts anticipate a price range between 24 and 41, with an average target of 32.5, suggesting a cautiously optimistic view on the stock’s potential.
Consumer Opinions
Consumer sentiment about Keurig Dr Pepper Inc. (KDP) reflects a mix of satisfaction and concerns, showcasing the company’s impact on its patrons.
| Positive Reviews | Negative Reviews |
|---|---|
| “Great variety of flavors; my favorite!” | “Expensive compared to other brands.” |
| “Convenient and easy to use.” | “Coffee pods can be wasteful.” |
| “Always refreshing and consistent taste.” | “Customer service could be improved.” |
| “Love the brand’s sustainability efforts.” | “Limited selection in some areas.” |
Overall, consumer feedback indicates that while KDP excels in flavor variety and convenience, there are notable concerns regarding pricing, sustainability, and customer service.
Risk Analysis
In evaluating the potential investment in Keurig Dr Pepper Inc. (KDP), it’s essential to consider various risks that could impact its performance.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in consumer demand and preferences. | High | High |
| Regulatory Risk | Changes in beverage regulations affecting operations. | Medium | High |
| Supply Chain Risk | Disruptions in supply chains impacting production. | Medium | Medium |
| Competitive Risk | Increased competition from both traditional and new entrants. | High | Medium |
| Financial Risk | Volatility in commodity prices affecting margins. | Medium | High |
KDP faces high market and competitive risks, particularly as consumer preferences shift toward healthier options. Recent trends indicate a growing demand for low-sugar beverages, which could pose challenges for KDP’s product lines.
Should You Buy Keurig Dr Pepper Inc.?
Keurig Dr Pepper Inc. (KDP) has a solid portfolio of flagship products, including its popular coffee brands and beverage systems. The company’s financial ratios show a net margin of 9.39%, a return on invested capital (ROIC) of approximately 5.66%, and a weighted average cost of capital (WACC) of 4.7%. Despite these strengths, recent trends indicate a bearish market sentiment and seller dominance in trading volumes.
Given the current financial metrics, KDP’s net margin is positive, and although its ROIC is slightly above WACC, the long-term trend is negative, and recent trading volumes show seller dominance. Therefore, while the fundamentals are relatively stable, I recommend waiting for a bullish reversal in the stock price and a return of buyer volumes before considering an investment.
It’s important to note that KDP faces risks related to competition in the beverage industry, potential supply chain disruptions, and overall market dependence, which could affect future performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Vise Technologies Inc. Invests $635,000 in Keurig Dr Pepper, Inc $KDP – MarketBeat (Nov 16, 2025)
- Keurig Dr Pepper (NASDAQ:KDP) investors are sitting on a loss of 21% if they invested three years ago – Yahoo Finance (Nov 12, 2025)
- Jefferies Remains Positive on Keurig Dr Pepper (KDP), Sees Investor Confidence Returning – MSN (Nov 14, 2025)
- Keurig Dr Pepper, Inc $KDP Shares Bought by Police & Firemen s Retirement System of New Jersey – MarketBeat (Nov 16, 2025)
- KBC Group NV Has $10.80 Million Holdings in Keurig Dr Pepper, Inc $KDP – MarketBeat (Nov 16, 2025)
For more information about Keurig Dr Pepper Inc., please visit the official website: keurigdrpepper.com
