Dr Pepper Snapple Group Inc. (DPS), the leading manufacturer and distributor of non-alcoholic beverages in the U.S., recently declared that its board of directors has approved a new share repurchase program. The new program reflected the company’s sound financial position and well-defined future prospects.
Under this program, the company will be authorized to repurchase up to $1.0 billion worth of common shares apart from its ongoing $2.0 billion share repurchase program. After this authorization, the company will have a total authorization of $3.0 billion, of which it has utilized approximately $1.5 billion till the end of third-quarter 2011. The company had approximately 218.2 million shares outstanding at the end of third-quarter 2011.
Dr Pepper has always been committed to create value for its shareholders by returning capital in the form of dividends and share repurchase program. To improve shareholders’ wealth, the company will repurchase shares from time to time depending on market conditions. These strategies will enhance shareholders’ return and boost the market value of the stock.
Apart from this, Dr Pepper has declared a quarterly dividend of 32 cents per share on its common shares, payable on January 6, 2012 to stockholders of record as of December 19, 2011.
Earlier, the company reported its third-quarter 2011 quarterly result. Dr Pepper’s earnings per share grew 18.3% to 71 cents a share from 60 cents a share in the year-ago quarter. However, quarterly earnings remain in line with the Zacks Consensus Estimate.
During the quarter, Dr Pepper's net sales grew approximately 5.0% year over year to $1,529.0 million. However, it fell short of the Zacks Consensus Estimate of $1,531.0 million. The year-over-year growth was mainly attributable to price increases, favorable foreign currency translations and revenues from The Coca-Cola Company (KO) licenses and favorable impact of repatriated brands.
Moving forward, Dr Pepper reiterated its full-year 2011 adjusted earnings in the range of $2.70 to $2.78 per share on a 3% to 5% growth in net sales. The current Zacks Consensus Estimate for fiscal 2011 stood at $2.73 per share.
Dr Pepper, currently has a Zacks #3 Rank, implying a short-term ‘Hold’ rating on the stock. Moreover, we maintain a long-term ‘Neutral’ recommendation on the stock.
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