Keurig Dr Pepper Inc. (KDP) Stock Analysis
Keurig Dr Pepper Inc. (KDP) Stock Analysis
Analysis from 10-Q filed 2025-10-28. Data as of Q4 2025.
Overall Grade: F (Concerning)
Keurig Dr Pepper Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 6.2% | Below expectations |
| FCF Margin | 9.0% | Healthy cash flow |
| Debt/Equity | 0.6x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore Keurig Dr Pepper Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Keurig Dr Pepper Inc. earns 6.2% ROIC, Bottom 50% in Consumer Staples
Keurig Dr Pepper Inc.'s trailing-twelve-month ROIC of 6.2% ranks Bottom 50% in Consumer Staples companies (sector median: 6.7%), driven by NOPAT margin of 16.7% combined with asset turnover of 0.3x. Source: 10-Q filed 2025-10-28. Gross margin of 54.2% with operating margin at 21.5% reflects strong pricing power.
| Metric | KDP | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.2% | Warning | Below sector median of 6.7% |
| Return on Equity (ROE) | 8.3% | Adequate | Moderate equity returns |
| Gross Margin | 54.2% | Excellent | Strong pricing power |
| Operating Margin | 21.5% | Excellent | Efficient operations |
Cash Flow: Keurig Dr Pepper Inc. generates $1.5B FCF at 9.0% margin, positive NaN/8 quarters
Keurig Dr Pepper Inc. generated $1.5B in free cash flow (TTM), a 9.0% FCF margin, a margin that ranks Top 50% in Consumer Staples. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-28.
| Metric | KDP | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 9.0% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $1.5B | Good | Positive cash generation |
| OCF/Net Income | 1.0x | Good | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Keurig Dr Pepper Inc. at 0.6x leverage
Keurig Dr Pepper Inc.'s debt-to-equity ratio of 0.6x reflects moderate leverage. Total debt of $16.1B offset by $1.0B in cash. Source: 10-Q filed 2025-10-28.
| Metric | KDP | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.6x | Good | Moderate leverage |
| Net Cash Position | $-15.1B | Warning | Net debt position |
Valuation: Keurig Dr Pepper Inc. trades at 18.3x earnings
Keurig Dr Pepper Inc. trades at a P/E of 18.3x. Free cash flow yield of 3.9% reflects market expectations for growth.
| Metric | KDP | Rating | Context |
|---|---|---|---|
| P/E Ratio | 18.3x | Adequate | Reasonable valuation |
| EV/Sales | 3.2x | Good | Growth premium priced in |
| FCF Yield | 3.9% | Adequate | Lower cash yield |
| Dividend Yield | 3.3% | Adequate | Meaningful income |
Capital Allocation: Keurig Dr Pepper Inc. returns 3.3% shareholder yield
Keurig Dr Pepper Inc.'s total shareholder yield is 3.3% (dividends 3.3% + buybacks 0.0%). Source: 10-Q filed 2025-10-28.
| Metric | KDP | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 3.3% | Good | Dividend + buyback yield combined |
| Buyback Yield | 0.0% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $1.3B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.2% | Bottom 50% | 0.9x below |
| Free Cash Flow Margin | 9.0% | Top 50% | 1.6x above |
| Gross Margin | 54.2% | Top 10% | 1.7x above |
| Operating Margin | 21.5% | Top 25% | 2.9x above |
| Return on Equity (ROE) | 8.3% | Bottom 50% | 1.0x below |
| P/E Ratio | 18.3x | N/A | - |
Financial Scorecard
| Metric | KDP | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.2% | Warning | Bottom 50% of sector (median: 6.7%) |
| Free Cash Flow Margin | 9.0% | Adequate | Top 50% of sector (median: 5.7%) |
| Gross Margin | 54.2% | Excellent | Top 10% of sector (median: 31.1%) |
| Debt to Equity Ratio | 63.3% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 18.3x | Adequate | Fair value |
| Free Cash Flow Yield | 3.9% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is Keurig Dr Pepper Inc.'s Return on Invested Capital (ROIC)?
Keurig Dr Pepper Inc. (KDP) has a trailing twelve-month Return on Invested Capital (ROIC) of 6.2%. This compares below the sector median of 6.7%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Keurig Dr Pepper Inc.'s Free Cash Flow Margin?
Keurig Dr Pepper Inc. (KDP) has a free cash flow margin of 9.0%, generating $1.5 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is Keurig Dr Pepper Inc. stock overvalued or undervalued?
Keurig Dr Pepper Inc. (KDP) trades at a P/E ratio of 18.3x, which is above the sector median of N/A. The EV/Sales multiple is 3.2x. Free cash flow yield is 3.9%, which is in line with market averages.
Q: Does Keurig Dr Pepper Inc. pay a dividend?
Keurig Dr Pepper Inc. (KDP) currently pays a dividend yield of 3.3%. Including share buybacks, the total shareholder yield is 3.3%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: How much debt does Keurig Dr Pepper Inc. have?
Keurig Dr Pepper Inc. (KDP) has a debt-to-equity ratio of 0.6x with total debt of $16.1 billion. Net debt position is $15.1 billion.
Q: What is Keurig Dr Pepper Inc.'s revenue and earnings growth?
Keurig Dr Pepper Inc. (KDP) grew revenue by 8.2% year-over-year. Earnings per share increased by 45.7% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: How does Keurig Dr Pepper Inc. compare to competitors in Consumer Staples?
Compared to other companies in Consumer Staples, Keurig Dr Pepper Inc. (KDP) shows: ROIC of 6.2% is below the sector median of 6.7% (Bottom 48%). FCF margin of 9.0% exceeds the sector median of 5.7% (Top 33% of sector). Gross margin at 54.2% is 23.1 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Staples companies with available SEC filings.
Q: What warning signs should I watch for with Keurig Dr Pepper Inc.?
Keurig Dr Pepper Inc. (KDP) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-28. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.