Dr Pepper gets a boost

Shares of the beverage company are up despite a decline in both sales and shipments this quarter.

By Motley Fool Investor Beat Feb 12, 2014 4:38PM
Shares of the beverage company Dr Pepper Snapple Group (DPS) were up Wednesday, despite news that both sales and shipments were down this quarter by about 2 percent.

In Wednesday's "Stock of the Day" video, 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 towards healthy food and drink continue to gain traction.
The biggest story in this space, however, is Coca-Cola's (KO) recent deal with Green Mountain Coffee Roasters (GMCR), to potentially release a version of Coke's beverages that can be made at home. Simon says that with Coke and PepsiCo (PEP) 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.

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Tags: DPSGMCRKO
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