Keurig Dr Pepper outperforms other beverage stocks against tough macro backdrop
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The beverage industry is facing serious disruption in 2022 instead of seeing a smooth ride with pandemic restrictions rolling off. Commodity inflation and macro factors have caused some analysts to pull back on earnings expectations for the year.
An outperformer so far against the tough backdrop is Keurig Dr Pepper (NASDAQ:KDP), which is up 0.2% in 2022 to easily outpace the 10% drop for the S&P Index 500 and the 1.7% decline for the Invesco Dynamic Food & Beverage ETF (NYSEARCA:PBJ).
KDP has also had a better share price return so far than Coca-Cola (-0.4%) and PepsiCo (-9.4%).
The beverage company's minimal exposure to Europe amid the Russia-Ukraine conflict is a big factor in the outperformance. That compares to the exposure of beverage companies like Brown-Forman Corporation (NYSE:BF.B), Coca-Cola (NYSE:KO) and Primo Water Corporation (PRMW) at greater than 20% of total sales. Beside KDP, a couple of beverage stocks with no exposure or limited exposure to Europe are Constellation Brands (NYSE:STZ) and Duckhorn Portfolio (NYSE:NAPA).
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is the soft drink stock with the highest Seeking Alpha Quant Rating.
Heineken (OTCQX:HEINY) is the beer stock with the highest Seeking Alpha Quant Rating.
Diageo (NYSE:DEO) is the distillers/vinters stock with the highest Seeking Alpha Quant Rating.