Keurig Green Mountain and Monster Beverage: 2 Growing Companies for Your Portfolio

These two growing beverage companies are worth a look.

May 20, 2014 at 12:45PM

Philip A. Fisher pioneered the "growth stock" school of investing, in which people invest in companies that harbor above-average growth potential. Home coffee and tea brewing system company Keurig Green Mountain (NASDAQ:GMCR) and energy drink seller Monster Beverage (NASDAQ:MNST) may fit the "growth stock" criteria. Let's take a look at just how fast these companies are growing and see whether or not these companies sit on solid financial footing.

Easier beverage prep


Keurig Green Mountain makes it easier for the busy consumer to prepare coffee or tea throughout the day. The company sells a home brewing system that brews coffee, tea, and other hot beverages. In an effort to secure market leadership in home brewing, Keurig Green Mountain partners with as many coffee and tea companies as it can to procure exclusive arrangements to manufacture K-Cups on their behalf for use in Keurig machines.

Keurig Green Mountain grew its revenue, net income, and free cash flow 6%, 25%, and 4% so far this year. Increased K-Cup volume served as the primary driver for the overall year-to-date revenue expansion.

Higher sales volume of its packs, lower expenses stemming from lower green coffee expenses, and interest expense due to lower long-term debt outstanding contributed to the gains in year-to-date net income. Lower capital expenditures contributed to the gains in free cash flow.

 Keurig Green Mountain sits on an excellent balance sheet, with cash and long-term debt-to-equity clocking in at 34% and 5%, respectively, last quarter. A low long-term debt balance means less interest to choke out profitability and cash flow. Keurig Green Mountain recently initiated a regular dividend and paid out 8% of its year-to-date free cash flow. Currently, Keurig Green Mountain pays shareholders $1 per share per year, yielding 0.9% annually.

Energy fuels growth


Monster Beverage sells "alternative" beverages under names such as Monster Energy and Muscle Monster. Monster Beverage expanded its revenue, net income, and free cash flow 11%, 50%, and 275%, respectively, in the most recent quarter.

Global volume increases from its Monster Energy brand and expansion into international markets served as the primary catalysts for the increase in revenue. Production efficiencies and lower expenses stemming from termination of distributors, lower insurance premiums, and lower marketing expenses contributed to gains in net income.

Favorable changes in operating assets and liabilities, specifically in inventory, accounts receivable, and income taxes payable, contributed to the year-over-year gain in free cash flow. You can't ask for a better balance sheet, with cash clocking in at 68% of stockholder's equity and no long-term debt. Monster Beverage does not currently pay a regular dividend, as it prefers reinvesting in the business.

The future
Both of these companies still have room to grow. Keurig Green Mountain wants to expand into the home carbonated soda business with the development of the Keurig Cold device. Look for Keurig to expand its partnership base in order to bring you a wider variety of beverage options. Moreover, look for Keurig Green Mountain's dividend to grow over time. Monster Beverage's expansion into international markets will serve as a catalyst for future capital gains and possible dividends. With rock-solid growth and balance sheets these companies definitely deserves a spot in your portfolio.

More rock-solid companies for your portfolio
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


William Bias has no position in any stocks mentioned. The Motley Fool recommends Keurig Green Mountain and Monster Beverage. The Motley Fool owns shares of Monster Beverage. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers