This Beverage Company is a Bargain

Today, I am recommending the purchase of Keurig Dr. Pepper (KDP).

After the recent big run in financials, and cyclically sensitive names, which has benefited our Buy List, I want to diversify through a new consumer non-discretionary name.

The company was formed in 2018 through the merger of Green Mountain Keurig and Dr. Pepper Snapple and has done well since it began operations.

Its low, single-digit sales gains, combined with further cost synergies and cost reductions, should lead to solid earnings growth going forward.

Trading at 19X next year’s estimates, the stock sells for a discount to the overall market and other beverage makers. Buy KDP under $31.75. My target is $36.

If you are an Inner Circle Subscriber following the Model Portfolio, buy KDP for a 5% position in the Value Sector.