2 Beverage Stocks to Avoid This Month

NYSE: KDP | Keurig Dr Pepper Inc. News, Ratings, and Charts

KDP – Beverage companies are reshaping their businesses to offer lower sugar drinks, sustainable packaging, and advanced ordering systems. However, not all companies have the financial wherewithal to adopt these changes promptly. Furthermore, with the surging COVID-19 cases, many consumers are again avoiding away-from-home beverage consumption due to the public health risks associated with it. Given this backdrop, we think investors are better off avoiding beverage stocks Keurig Dr Pepper (KDP) and Monster Beverage (MNST). Read on.

With accelerating digitization and advanced ordering systems, beverage companies have witnessed solid revenue growth over the past months. However, people are again taking a pass on away-from-home beverage consumption due to rising health concerns with the rising spread of the COVID-19 omicron variant. The negative effects of energy drinks and other sugary drinks is also a growing cause for concern among consumers.

Though many beverage companies are trying to reshape their products to address concerns related to health issues by focusing on dairy-free and plant-based alternatives, sugar reduction, and sustainable packages, not all companies are fundamentally strong enough to adopt such changes quickly.

Therefore, we believe financially weak beverage stocks Keurig Dr Pepper Inc. (KDP) and Monster Beverage Corporation (MNST) are best avoided now.

Keurig Dr Pepper Inc. (KDP)

Plano, Tex.-based KDP is a beverage company that offers more than 125 hot and cold beverages. The company operates through Coffee Systems; Packaged Beverages; Beverage Concentrates; and Latin America Beverages segments. KDP’s brand portfolio includes CSD brands, which include Dr. Pepper, Canada Dry, Schweppes, Crush, Sunkist, A&W, 7UP, Sun Drop, Squirt, Big Red, Hawaiian Punch and RC Cola, and NCB brands.

KDP’s net sales increased 7.6% year-over-year to $3.25 billion in the third quarter, ended Sept. 30, 2021. However, the company’s interest expense was $116 million. Its cash and cash equivalents decreased 16.7% to $200 million for the nine months ended Sept.30, 2021.

KDP’s POWR Ratings are consistent with this bleak outlook. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting. The stock has a C grade for Value and Growth. We have also graded KDP for Quality, Sentiment, Momentum, and Stability. Click here to access all KDP’s ratings. KDP is ranked #15 of 35 stocks in the B-rated Beverages industry.

Monster Beverage Corporation (MNST)

Incorporated in 1990, MNST in Corona, Calif., develops, markets, and distributes energy drink beverages and concentrates for energy drink beverages in the United States and internationally. The company operates through three segments – Monster Energy Drinks; Strategic Brands; and Other. The company offers carbonated and non-carbonated energy drinks, non-carbonated dairy-based coffee and energy drinks, non-carbonated energy teas and shakes, and ready-to-drink packaged energy drinks.

During the third quarter, ended Sept.30, 2021, MNST’s net sales increased 13.2% year-over-year to $1.41 billion. However, the company’s operating expenses grew 24% from the year-ago value to $344.69 million. Its operating income decreased 3.1% from the prior-year quarter to $444.46 million. Also, the company’s net income declined 3% year-over-year to $337.21 million.

Analysts expect MNST’s EPS to decrease 1.6% in the current quarter of its fiscal 2021.

MNST’s poor prospects are also apparent in its POWR Ratings. The stock has a D grade for Growth and Value. In addition to the POWR Rating grades I have just highlighted, one can see MNST’s ratings for Stability, Quality, Sentiment, and Momentum here. MNST is ranked #19 in the same industry.

Want More Great Investing Ideas?

Top 10 Stocks for 2022

3 Stocks to DOUBLE This Year

How to Trade Options with the POWR Ratings

9 “Must Own” Growth Stocks


KDP shares were unchanged in after-hours trading Thursday. Year-to-date, KDP has gained 1.55%, versus a -1.48% rise in the benchmark S&P 500 index during the same period.

About the Author: Priyanka Mandal

Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
KDPGet RatingGet RatingGet Rating
MNSTGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

Does This Chart Point to a Stock Correction?

Many seasoned investors are getting a bit concerned about stocks surging to 5,100 for the S&P 500 (SPY). That’s because earnings growth is nearly non-existent and thus stock prices are getting to elevated levels. This could point to a nasty correction ahead. That is why you will want to tune into Steve Reitmeister’s most up to date market commentary along with trading plan and top picks. Read on below for the full story...

Snowflake (SNOW) Earnings Alert: Should You Buy Now?

Snowflake (SNOW) will release its fourth-quarter results this Wednesday. The cloud-based data company is expected to report a year-over-year growth in earnings and revenue. Amid this, should investors consider buying the stock ahead of its earnings? Read on to learn my view…

Jumpstart Your Portfolio With These 3 Biotech Stocks

The biotech industry’s robust growth potential is fueled by scientific advancements, rapid technological adoption, and supportive government initiatives. Thus, you could consider investing in top biotech stocks Exelixis (EXEL), Vertex Pharmaceuticals (VRTX), and Vanda Pharmaceuticals (VNDA) to strengthen your portfolio. Keep reading…

Rev up Your Returns With These 3 Hot Auto Stocks

The auto industry is well-positioned for massive expansion, driven by the incorporation of cutting-edge technology and a rise in EV sales. Given this backdrop, quality auto stocks DENSO Corporation (DNZOY), REV Group (REVG), and Miller Industries (MLR) could be solid buys to rev up your returns now. Read on…

Is a Stock Bubble Forming?

We all have Nvidia (NVDA) to thank for the S&P 500 (SPY) finally breaking above 5,000. Truly one of the most impressive earnings announcements in years. Yet the valuation for NVDA, and the rest of the mega cap tech space is getting lofty calling into question whether a bubble is forming. Learn what investing expert Steve Reitmeister thinks about the current state of the market along with his a preview of this top 12 stocks to buy now. Read on below for more...

Read More Stories

More Keurig Dr Pepper Inc. (KDP) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All KDP News