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Dr Pepper Gets a Boost

By Mark Reeth and Simon Erickson – Feb 12, 2014 at 2:00PM

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Shares of Dr Pepper Snapple Group were up today, despite a decline in both sales and shipments this quarter. How does Dr Pepper fit into the soda landscape today?

Shares of beverage company Dr Pepper Snapple Group (DPS) were up today, despite reporting that both sales and shipments were down this quarter by about 2%. In today's Stock of the Day, Motley Fool analyst Simon Erickson and host Mark Reeth take a look at Dr Pepper and the soda industry as a whole. Simon notes that sales overall of soda in the U.S. may be in secular decline, as movements toward healthy food and drink continue to gain traction.

The biggest story in this space, however, is Coca-Cola's (KO -1.37%) recent deal with Green Mountain Coffee Roasters to potentially release a version of Coke's beverages that can be made at home. Simon says that with Coke and PepsiCo (PEP -1.38%) having mirrored each other's every move throughout the years, he'll be looking to Pepsi to follow suit and make a similar deal.

So what of the smaller player in the game, Dr Pepper? Simon says that while he sees it as a good company with a pretty attractive dividend and a steady performer that has tripled since the downturn, he sees the soda game as being all about the ability to scale distribution. If he were investing in soda today, Simon says he'd be picking one of the bigger players in the space.

Mark Reeth and Simon Erickson have no position in any stocks mentioned. The Motley Fool recommends Green Mountain Coffee Roasters. It recommends and owns shares of Coca-Cola and PepsiCo. 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.

Stocks Mentioned

Coca-Cola Stock Quote
Coca-Cola
KO
$63.47 (-1.37%) $0.88
Dr Pepper Snapple Group, Inc. Stock Quote
Dr Pepper Snapple Group, Inc.
DPS
PepsiCo Stock Quote
PepsiCo
PEP
$183.12 (-1.38%) $-2.57
Keurig Green Mountain, Inc. Stock Quote
Keurig Green Mountain, Inc.
GMCR.DL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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