Dr. Pepper Snapple Group - Final Thoughts
Ticker Symbol: DPS
Final Thoughts
Throughout its short history, Dr. Pepper Snapple has been a distant third behind market giants Pepsico and Coca-Cola. Despite a varied product portfolio, competing against staple product like Coke and Pepsi remains a challenge. Yet the current decline in stock prices has actually helped to lessen the gap between Dr. Pepper Snapple and its competitors. At $20.90/share in mid-May, Dr. Pepper Snapple is just 28% below its all-time high stock price of $26.82/share, a feat that few companies can currently claim. Moreover, since March Dr. Pepper Snapple has been substantially out-performing the broad market in terms of percentage gains.
Because Dr. Pepper Snapple holds a variety of low-cost products, they have the ability to fare better in this turbulent economy. While some of their "premium brands" are struggling as of late, many of their brands saw growth so far in 2009, especially some of their low-cost products such as RC Cola. If Dr. Pepper Snapple can leverage the weakened state of the economy and of their giant competitors, they may have a chance to gain market share. This will be no easy feat, but Dr. Pepper Snapple is a company worth watching.
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