KDP
Keurig Dr Pepper Inc.
Consumer Defensive · Beverages - Non-Alcoholic · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong annual growth in revenue (+8.2%) and especially net income (+44.3%) and EPS (+45.7%) supported solid scores in the growth factor.
- Healthy operating and net margins contributed positively to profitability, though modest return on assets tempered the overall profitability score.
- The absence of any macro theme assignment meant no thematic tailwind bonus was applied, and softening quarterly momentum limited the composite score further.
Why Not Higher
- The sharp deceleration in the most recent quarter — with net income dropping to $270 million in 2026Q1 from a peak of $662 million in 2025Q3 — weighed on the momentum factor and overall composite score.
- A 3.7% return on assets against a $55.5 billion asset base and a 60.1% dividend payout ratio both signal constraints on capital efficiency and financial flexibility that capped the profitability and dividend scores.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $15,351,000,000 to FY2025's $16,603,000,000, a gain of +8.2%. Net income rose +44.3% over the same period, from FY2024's $1,441,000,000 to FY2025's $2,079,000,000, while diluted EPS expanded +45.7% from FY2024's $1.05 to FY2025's $1.53.
The model rewarded the combination of solid top-line expansion and substantially accelerating bottom-line growth, with earnings and per-share metrics growing at roughly five times the rate of revenue, indicating meaningful margin improvement alongside volume gains.
In FY2025, KDP posted an operating margin of 21.5% and a net margin of 12.5%, while return on assets came in at 3.7%.
The model recognized healthy operating and net margins but was tempered by the relatively modest 3.7% return on assets in FY2025, suggesting the company's large asset base — common in consumer-staples businesses with significant intangibles — limits capital efficiency scores.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four reported quarters, revenue rose from 2025Q2's $4,163,000,000 to a peak of 2025Q4's $4,499,000,000 before declining to 2026Q1's $3,976,000,000. Operating income followed a similar arc, peaking at 2025Q3's $995,000,000 and falling to 2026Q1's $756,000,000. Net income also declined sharply from 2025Q3's $662,000,000 to 2026Q1's $270,000,000.
The model captured a pattern of mid-period acceleration followed by notable deceleration in the most recent quarter, producing a moderate momentum score that reflects the mixed directional trend across revenue, operating income, and net income.
KDP's dividends per share have risen each year from FY2022's $0.775 to FY2023's $0.83, FY2024's $0.89, and FY2025's $0.92, while the FY2025 dividend payout ratio stood at 60.1% of net income.
The model acknowledged a consistent multi-year dividend growth trend but the 60.1% payout ratio in FY2025 signals that a meaningful share of earnings is committed to dividends, which may limit flexibility and temper the overall dividend score.
KDP is not currently assigned to any of the 24 tracked macro themes.
The absence of a theme assignment means the model did not apply any thematic tailwind or alignment bonus to this security; this reflects the current classification state and is not an indicator of the company's underlying business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Keurig Dr Pepper delivered strong full-year results in FY2025, with revenue growing 8.2% to $16.6 billion and net income surging 44.3% to $2.1 billion, reflecting meaningful margin expansion alongside volume gains. Operating margins of 21.5% and net margins of 12.5% indicate a healthy profitability profile, though a relatively modest 3.7% return on assets reflects the weight of a large asset base common in consumer-staples businesses. Recent quarterly momentum has softened, with revenue, operating income, and net income all declining in the most recent quarter (2026Q1), introducing some near-term uncertainty. The company also maintains a consistent dividend growth track record, though a 60.1% payout ratio limits financial flexibility.
Plain English
KDP grew its sales and profits strongly last year, but the most recent quarter showed things slowing down, and a big chunk of earnings is already committed to dividends, so there are reasons to be cautious even though the business looks solid overall.
Bull Case vs. Bear Case
Bull Case
- Revenue grew 8.2% year-over-year to $16.6 billion in FY2025, while net income jumped 44.3% — earnings grew at roughly five times the rate of revenue, signaling strong margin improvement.
- Operating margins of 21.5% and net margins of 12.5% in FY2025 reflect a healthy and profitable business model with meaningful pricing power.
- Dividends per share have risen every year from $0.775 in FY2022 to $0.92 in FY2025, demonstrating a consistent commitment to returning capital to shareholders.
Bear Case
- Quarterly momentum has deteriorated sharply, with net income falling from $662 million in 2025Q3 to just $270 million in 2026Q1, raising questions about near-term earnings sustainability.
- Return on assets of only 3.7% in FY2025 against a $55.5 billion asset base suggests limited capital efficiency, a structural constraint common in consumer-staples companies with large intangible assets.
- A 60.1% dividend payout ratio in FY2025 means a significant portion of earnings is committed to dividends, reducing flexibility to invest, pay down debt, or weather earnings pressure.
What Could Change the Picture
Bullish Triggers
- A sustained rebound in quarterly revenue and net income from the 2026Q1 trough would signal that the recent deceleration was temporary rather than structural.
- Continued expansion of operating and net margins beyond FY2025 levels would reinforce the thesis that earnings are growing faster than revenue on a durable basis.
Bearish Triggers
- Further deterioration in quarterly operating income or net income beyond the 2026Q1 decline would suggest the FY2025 annual results may not be repeatable.
- Any reduction or freeze in dividend growth could signal management concern about cash flow sustainability given the already elevated 60.1% payout ratio.
Risk Profile
Medium RiskThe most recent quarter (2026Q1) showed notable deceleration across revenue, operating income, and net income, introducing uncertainty about whether FY2025's strong annual results will carry forward. The company's $55.5 billion asset base, while typical for a consumer-staples business with significant intangibles, contributes to a modest 3.7% return on assets that limits upside in capital efficiency metrics.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.