Who Knew Dr. Pepper Snapple Group’s Returns Were This High?

Coca-Cola (KO) has a market cap of $172 billion. PepsiCo’s (PEP) market cap is $136 billion.

By comparison, Dr. Pepper Snapple Group (DPS) is tiny. The company has a market cap of ‘just’ $14.7 billion – less than one-tenth the size of Coca-Cola.

Unlike its larger rivals, Dr. Pepper Snapple Group does not have a global presence. The company operates in the United States, Canada, Mexico, and the Caribbean. In 2014, sales broke down geographically as follows:

The company’s smaller geographic area allows it to better focus its advertising messages and spending. The United States is by far the company’s most important market.

Dr. Pepper Snapple Group was created in 2008 when the company was spun-off from Cadbury Plc.

Two well-known investors have positions in Dr. Pepper Snapple.  Mario Gabelli owns 1.9 million shares, and Joel Greenblatt owns over 500,000 shares.

Dr. Pepper Snapple Group Brands

The image below gives a quick glance of the company’s brands.

The company’s most recognizable brands include:

Dr. Pepper Snapple’s most successful brand is Dr. Pepper.

The company also has its ‘most successful brand’ consumer soft drink brands (shown below).

Growth Prospects

Dr. Pepper Snapple Group’s revenue growth comes primarily though increasing market share of its primary brands.

The company accomplishes this through advertising spending. Dr. Pepper Snapple Group has spent between $470 and $490 million each year on advertising in each of its last 3 fiscal years. The company spends approximately 8% of sales on advertising.