SodaStream International (NASDAQ: SODA) and Dr Pepper Snapple Group (NYSE:DPS) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitabiliy, dividends, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for SodaStream International and Dr Pepper Snapple Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SodaStream International 0 4 0 0 2.00
Dr Pepper Snapple Group 1 9 5 0 2.27

SodaStream International currently has a consensus target price of $44.00, suggesting a potential downside of 23.57%. Dr Pepper Snapple Group has a consensus target price of $98.17, suggesting a potential upside of 6.83%. Given Dr Pepper Snapple Group’s stronger consensus rating and higher possible upside, analysts plainly believe Dr Pepper Snapple Group is more favorable than SodaStream International.

Dividends

Dr Pepper Snapple Group pays an annual dividend of $2.32 per share and has a dividend yield of 2.5%. SodaStream International does not pay a dividend. Dr Pepper Snapple Group pays out 51.1% of its earnings in the form of a dividend. SodaStream International has raised its dividend for 7 consecutive years.

Risk and Volatility

SodaStream International has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Dr Pepper Snapple Group has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Earnings and Valuation

This table compares SodaStream International and Dr Pepper Snapple Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SodaStream International $490.48 million 2.53 $80.58 million $2.43 23.69
Dr Pepper Snapple Group $6.46 billion 2.61 $1.61 billion $4.54 20.24

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

Profitability

This table compares SodaStream International and Dr Pepper Snapple Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SodaStream International 10.83% 13.96% 11.17%
Dr Pepper Snapple Group 13.03% 38.52% 8.98%

Institutional and Insider Ownership

44.8% of SodaStream International shares are held by institutional investors. Comparatively, 90.1% of Dr Pepper Snapple Group shares are held by institutional investors. 0.6% of Dr Pepper Snapple Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Dr Pepper Snapple Group beats SodaStream International on 12 of the 17 factors compared between the two stocks.

About SodaStream International

SodaStream International Ltd. is a sparkling water company. The Company manufactures, distributes and sells home beverage carbonation systems, which enable consumers to transform ordinary tap water into sparkling water and flavored sparkling water. The Company’s segments include The Americas, Western Europe, Asia-Pacific, and Central and Eastern Europe, Middle East and Africa (CEMEA). The Americas segment consists of the United States, Canada and other markets in North America, Central America and South America, which are influenced by the consumption culture of the United States. The Western Europe segment consists of its markets in Western and Northern Europe, which are characterized by high price levels. Its Asia-Pacific segment consists of its markets in Australia and New Zealand, together with other markets in East Asia, including Japan and South Korea. The CEMEA segment consists of its markets in Central and Eastern Europe, Israel and South Africa.

About Dr Pepper Snapple Group

Dr Pepper Snapple Group, Inc. is an integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States, Mexico and Canada. The Company offers a diverse portfolio of flavored (non-cola) carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including ready-to-drink teas, juices, juice drinks, water and mixers. The Company’s segments include Beverage Concentrates, Packaged Beverages and Latin America Beverages. The Company’s brand portfolio includes CSD brands, such as Dr Pepper, Canada Dry, Penafiel, Squirt, 7UP, Crush, A&W, Sunkist soda and Schweppes, and NCB brands, such as Snapple, Hawaiian Punch, Mott’s and Clamato. The Company’s NCB brands include Snapple, Hawaiian Punch, Mott’s, FIJI mineral water, Clamato, Yoo-Hoo, Deja Blue, Bai Brands, ReaLemon, AriZona tea, Vita Coco coconut water, Mr and Mrs T mixers, BodyArmor, Nantucket Nectars, Garden Cocktail, Mistic and Rose’s.

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