Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 18 May 2026
KDP· Consumer Staples
Keurig Dr Pepper
Keurig Dr Pepper has a real beverage portfolio and decent margins, but 6.7x net-debt/EBITDA and stagnant EPS leave it stuck in unclear territory.
Buffett fit
Weak fit
Owner
50
Durability
72
Management
41
Price
56
Score updated 27 Oct 2026 · analysis from 18 May 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Staples stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
At 21.5x earnings you are paying a full CPG multiple for a business EPS at 0.2% per year.
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The brand portfolio absolutely makes it to 2036, Dr Pepper has been around since 1885.
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Share count is shrinking only 1% per year and conversion of 0.72 means cash earnings lag book earnings.
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of 21.5x and owner-earnings yield of 3.8% leave essentially no cushion.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 153.8% and 21.3% reflect durable CPG economics
- 2Dr Pepper, Snapple and the Keurig system are genuinely iconic brands
- 3Revenue grew 7.0% per year over five years, steady, not spectacular
- 4Net income has been positive every year for five years
Concerns
5- 1 of just 4.1% trailing is far below Buffett's comfort zone
- 2Net-debt/EBITDA of 6.7x is uncomfortably high for a defensive name
- 3Five-year EPS CAGR of 0.2% means earnings have essentially flatlined
- 4/Net Income of 0.72 says reported earnings overstate cash
Price history
$34.99-3.0%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
KDP sells beverages (coffee pods, Dr Pepper, Snapple, Mott's, Bai) through grocery, convenience and the Keurig single-serve ecosystem. The 53.8% tells you the bottling and concentrate model is profitable, and the 21.3% is consistent with a mature CPG. But of just 4.1% trailing reveals the goodwill problem: the JAB-era merger inflated the asset base and dilutes the real underlying returns.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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