4. Cott – Cash Flows, EBITDA Grows
Cott’s free cash flow was $101 million for 2012’s fourth quarter. The ability to consistently generate free cash flow is an important indicator of a company’s financial health. It means they can grow their business without resorting to external financing. In essence, they’re funding their own expansion and growth initiatives.
Free cash flow is very important to investors. A company that’s generating free cash flow can use some of this cash to pay dividends and also use this cash to fund dividend increases.
Cott’s EBITDA increased 8% to $209 million in 2012. This is compared to $193 million for the year prior.
5. Monster Beverage – They’re Outperforming With Energy Drinks
Mr. Rodney C. Sacks, Company Chairman and CEO, stated: “While the growth of the energy drink market in the United States has softened from previous quarters, the Monster Energy® brand continues to grow in excess of market growth” (emphasis mine).
6. Starbucks – They’re on Trend…Always
Single cup coffee machines are all the rage today. Starbucks’ single cup pod brewer, the Verismo Coffee Machine, is making its presence felt in this competitive market. The company sold (up to Dec 30, 2012) more than 150,000 Verismo machines since they introduced it to the market in September 2012.
Furthermore, they acquired Teavana. They’re making a play into the specialty tea market. This represents significant potential for new revenues and returns for the company – and their investors. Teavana has more than 300 locations.
7. Their Initiatives Often Manifest as ROI
Cott’s strength is private-label beverages. They’re one of the world’s largest producers of beverages for retailers, brand owners, and distributors. The company is a leader in retailer brand carbonated soft drinks (CSDs) and Juices in North America. They’re also a leader in retailer brand CSDs and contract manufacturing in the United Kingdom.
For Monster Beverage Corp (NASDAQ:MNST), energy drinks are only one element of their diverse product lineup. The company also markets and distributes non-carbonated coffee, non-carbonated espresso energy drinks, iced teas, natural sodas, apple juice and juice blends, multi-vitamin juices, lemonades, vitamin enhanced waters, and probiotic drinks.
Starbucks Corporation (NASDAQ:SBUX) opened their 100th store in Beijing, China. The company has an aggressive growth strategy in place for this nation of approximately +1.3 billion people.
Mothers typically know best. If some take the time to perform due diligence as concerns beverages, they may advocate the potential in the above companies and others in this industry. They may try to divert you from some sugary drinks, but not the ROI potential in the overall offerings of these companies.
The article 7 Things Your Mother Never Told You About Beverage Companies originally appeared on Fool.com is written by Michael Ugulini.
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