Head-To-Head Review: Keurig Dr Pepper (NASDAQ:KDP) and Reeds (OTCMKTS:REED)

Keurig Dr Pepper (NASDAQ:KDP) and Reeds (OTCMKTS:REED) are both consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Profitability

This table compares Keurig Dr Pepper and Reeds’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Keurig Dr Pepper	9.75%	11.05%	5.09%
Reeds	-43.28%	N/A	-69.61%

Institutional and Insider Ownership

94.0% of Keurig Dr Pepper shares are held by institutional investors. Comparatively, 51.5% of Reeds shares are held by institutional investors. 0.4% of Keurig Dr Pepper shares are held by company insiders. Comparatively, 88.0% of Reeds shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Keurig Dr Pepper and Reeds”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Keurig Dr Pepper	$15.35 billion	2.28	$1.44 billion	$1.12	23.05
Reeds	$50.78 million	1.12	-$13.15 million	($1.22)	-0.87

Keurig Dr Pepper has higher revenue and earnings than Reeds. Reeds is trading at a lower price-to-earnings ratio than Keurig Dr Pepper, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Keurig Dr Pepper has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, Reeds has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Keurig Dr Pepper and Reeds, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Keurig Dr Pepper	2	7	11	0	2.45
Reeds	0	0	1	0	3.00

Keurig Dr Pepper presently has a consensus target price of $35.00, suggesting a potential upside of 35.55%. Reeds has a consensus target price of $1.75, suggesting a potential upside of 65.09%. Given Reeds’ stronger consensus rating and higher probable upside, analysts plainly believe Reeds is more favorable than Keurig Dr Pepper.

Summary

Keurig Dr Pepper beats Reeds on 11 of the 14 factors compared between the two stocks.

About Keurig Dr Pepper

Keurig Dr Pepper Inc. owns, manufactures, and distributors beverages and single serve brewing systems in the United States and internationally. It operates through three segments: U.S. Refreshment Beverages, U.S. Coffee, and International. The U.S. Refreshment Beverages segment manufactures and distributes branded concentrates, syrup, and finished beverages. Its U.S. Coffee segment offers finished goods relating to K-Cup pods, single serve brewers, specialty coffee, and ready to drink coffee products through Keurig.com website. The International segment provides sales in Canada, Mexico, the Caribbean, and other international markets from the manufacture and distribution of branded concentrates, syrup, and finished beverages; and sales in Canada from the manufacture and distribution of finished goods relating to the Company's single serve brewers, KCup pods, and other coffee products. It serves retailers, third-party bottlers and distributors, retail partners, hotel chains, office coffee distributors, and end-use consumers. The company offers its products under the Dr Pepper, Canada Dry, Green Mountain Coffee Roasters, Snapple, Mott's, The Original Donut Shop, Clamato, and Core Hydration brand name. Keurig Dr Pepper Inc. was founded in 1981 and is headquartered in Burlington, Massachusetts.

About Reeds

Reed's, Inc. engages in the manufacture and distribution of natural beverages in the United States. The company offers Reed's craft ginger beer; Reed's real ginger ales; Reed's Classic Mules; Reed's Hard Ginger Ale; Reed's ready to drink products; and Virgil's handcrafted sodas. It sells its products to natural food and gourmet retailers, grocery store chains, mass merchants, club stores, convenience and drug stores, liquor stores, industrial cafeterias, and on-premise bars and restaurants, as well as directly to consumers through www.drinkreeds.com. The company was formerly known as Original Beverage Corporation and changed its name to Reed's, Inc. in 2001. Reed's, Inc. was founded in 1987 and is headquartered in Norwalk, Connecticut.