7 Best Coffee Stocks to Buy Now

2. Keurig Dr. Pepper Inc. (NASDAQ:KDP)

Number of Hedge Fund Holders: 48

Average Upside Potential as of July 31: 5.50%

Keurig Dr. Pepper Inc. (NASDAQ:KDP) serves as a leading beverage company in North America. The company has a portfolio of over 125 owned, licensed, and partner brands. The company offers ready-to-drink beverages catering to diverse tastes including carbonated soft drinks, tea, still or sparkling water, juice, and non-alcoholic mixers. In the ready-to-brew category, specialty coffee and other specialty beverages in K-Cup pods are offered. In addition, traditional whole bean and ground coffee in bags, fractional packages, and cans are available for consumers. Simultaneously, consumers can enjoy ready-to-eat products from Keurig Dr. Pepper.

A consumer-centric innovation model is what has helped Keurig Dr. Pepper effectively capture the market of 45 million North American coffee consumers who use Keurig brewers. The company is known for transforming the way consumers brewed coffee through the introduction of K-Cup pod single serve coffee system. The experience that it has to offer to its consumers just doesn’t end here. Recently in March, Keurig has come up with another evolutionary experience by announcing the upcoming K-Rounds plastic-free pods which will be working in the new Keurig Alta system enabling consumers to make hot and cold barista-style beverages without any complex brewing techniques.

The above point of differentiation has brought financial stability for Keurig Dr. Pepper which recently reported strong results for the second quarter through solid EPS growth and growing net sales. Earnings came in at $0.38 per share and revenue inched up 3.5% year over year to $3.92 billion. The company witnessed double-digit growth in the International segment and robust performance in U.S. Refreshment Beverages. In the US coffee segment, although the net sales decreased by 2.1%, brewer shipments for the twelve months ending June 30, 2024 experienced growth which still proves the market share momentum of the firm.

The company’s ability to penetrate a wider coffee consumer base by challenging itself to reimagine what the brand could be makes it quite special. Apart from the quality and choice that Keurig has to offer, the firm has grown impressively thanks to a diversified beverage portfolio. Over the past five years, Keurig Dr. Pepper Inc. (NASDAQ:KDP) has grown its revenue by 6.7% and net income even more impressively by 17.8%. The stock was part of 48 investors’ portfolios at the close of the first quarter of 2024 and Citadel Investment Group was the top shareholder with a stake worth $277 million.