After initially moving higher, Keurig Dr. Pepper (KDP) is moving lower with the market today after reporting fourth-quarter earnings.

Earnings per share (EPS) of $0.39 vs. $0.35 was $0.01 less than expected, as high margin beverage concentrate sales continue to be weak due to COVID-19. However, the market was initially encouraged by a 6.6% increase in revenue, which was much better than the expected increase of 3%, and a 25% increase in the company’s dividend payout. In addition, the company gave very good guidance for 2021, with revenues expected to increase 3% to 4% and EPS to rise by 13% to 15%.

The stock has been feeling pressure recently from the rise in interest rates. However, at 19X the reasonable EPS estimate of $1.60, the stock offers good relative value in a market where hot value groups like financials and industrials are looking extended. Buy KDP under $31.75. My target is $36. The stock now yields an attractive 2.4% after the dividend boost.

Safety Insurance (SAFT) continues to report extraordinarily strong results due to fewer cars on the road in Massachusetts due to the impact of COVID-19. Fourth-quarter EPS jumped from $1.44 to $2.55, as the number of claims dwindled. For all of 2020, EPS rose from $5.25 to $8.64. Book value per share ended the year at $59.40, up from $52.44, aided by gains in the company’s investment portfolio.

While the profitability that was achieved in 2020 is not sustainable, the company should be able to realize a normalized EPS of $6.50 to $7.00 a share. This supports my $88 target. SAFT stock can be volatile in narrow ranges. So, this should give us the opportunity to buy the shares below $78. The 4.5% dividend yield will add to total returns.