Investors seeking sparkling profits.
In the modern beverage marketplace — where simplicity might as well equal mediocrity — the prospect of a single flavor might as well equal milk gone sour. Witness the Coca-Cola Co. (NYSE: KO) and its flagship product. At last count, the options include Coke, Diet Coke, Coke Zero Sugar, Cherry Coke, Cherry Coke Zero Sugar and Vanilla Coke. As for whether Coke can deliver a Wall Street KO, that has less to do with variety and everything to do with profitability. Here we look at eight soft drink-related stocks bubbling to the top of the market.
Coca-Cola Co.
Coke dates to 1886 and in the 21st century its stock remains a must-own, what with fans such as billionaire Warren Buffett. “We remain impressed by KO’s global brand portfolio,” says Ann Gurkin, senior vice president at Davenport and Co. in Richmond, Virginia. Coke’s third-quarter results exceeded consensus forecasts, thanks to growth across business units and continued innovation.
Jones Soda Co.
Founded in 1986, Seattle-based Jones pours its identity into funky flavors such as green apple, strawberry lime and “fufu berry.” Consumers give rave reviews and sure enough, this over-the-counter stock has risen about 8 percent over the last 12 months to 42 cents per share. Investors have seen a 56 percent jump since 2012, although since July 2016 Jones is down by a third.
PepsiCo (PEP)
Though the cola wars have faded, Coke versus Pepsi once set suburbanites in heated rival camps. A pioneer in cinema product placement (thanks to aggressive efforts by actress/board member Joan Crawford), PepsiCo trades at $111 per share. That’s tepid performance over the last year — but PepsiCo boasts a juggernaut lineup that includes Tropicana, Frito-Lay, Gatorade and Quaker Oats. As for why the bewigged Quaker on the box is grinning, half of Wall Street analysts (seven of 14) rate PEP stock a “strong buy.”
Dr Pepper Snapple Group (DPS)
Before investors weigh in, consumers do — and DPS ranks with Pepsi and Coke. “Dr Pepper Snapple comes in at 82 on the American Customer Satisfaction Index,” says Josh Blechman, director of capital markets at ACSI Funds. Yet DPS faces a major challenge in “a new generation of parents more selective and health conscious about what their families eat and drink.” Indeed, after doubling in three years the Dr Pepper Snapple share price has plateaued to the $85 range since October 2015.
SodaStream International (SODA)
Israel’s SodaStream pioneered at-home carbonated drink dispensers, wildly popular among households for its fun, DIY path of some 100 flavors. Yet the syrups make it more expensive off-the-shelf soda and the company has weathered repeated controversies over its treatment of Palestinian workers. As for whether Nasdaq investors are imbibing, the last three years have seen SODA climb more than 200 percent to $64 per share — about $15 less than a fizzy-water starter bundle with orange and lime flavor drops.
Monster Beverage Corp. (MNST)
Here’s a true Jekyll-and-Hyde story. The company gained traction as Hansen’s Natural Soda, a humble favorite of the Trader Joe’s crowd. Then in 2012, it renamed itself after its brash Monster products — and unleashed screaming profits. From January 2005 to 2015, the 82-cent share price pulled an Incredible Hulk by hitting $39. Today Monster trades at about $57 and is, among other things, the official drink of NASCAR. As for Hansen’s? Dumped off to Coca-Cola in June 2015.
Air Liquide
What good are carbonated beverages without the carbon that powers them? Airgas, the big name in American suppliers, was acquired last year for $13.4 billion by Air Liquide (which trades on the Euronext exchange as AI and is a Fortune 500 global company). Air Liquide stock plummeted in October by 7 percent — a likely reaction to flat third-quarter revenue — but the Airgas acquisition has provided an apparent boost: Since the February 2016 deal, Air Liquide is up about 15 percent.
Nestle
This Swiss business is much more than soda — marketing some 8,000 brands — but as the world’s largest food company, its holdings include the popular Perrier and San Pellegrino labels. San Pellegrino’s flavored Italian sodas in particular have enjoyed an increased marketing push in American supermarkets over the last five years, a time that saw Nestle stock (trading on the Swiss SIX exchange as NESN) jump 40 percent. If you want to toast that with a Perrier, so much the better.
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Soft Drink Stocks Savor Success originally appeared on usnews.com
