Monster Beverage Corp vs K eurig Company – Which Stock Is Better at the Present?

Monster Beverage Corp (MNST) and K eurig Green Mountain, Inc. (GMCR) are two opposing companies in the beverage industry.

There have been many changes in the soft drink industry’s perceptions of consumers’ preferences for healthy living. A focus on health and well-being is driving changes in consumption patterns. This is leading to increased use of organic, natural and plant-based ingredients in food and beverages.

Beverage companies are introducing new products to satisfy consumers’ demands. Customers are willing to pay more for healthier and lower-sugar soft drinks.

Soft drinks that are low in sugar, preservatives, or added colors, as well as those with no artificial sweeteners, are becoming more popular. Plant extracts, natural flavors, and non-concentrate juices are replacing their less healthy counterparts. The demand for tea, vitamin water, and flavored water is increasing. Water products with refreshing flavors and natural ingredients are very popular.

Americans love coffee. But, with the growing obsession with health, coffee has taken a new level. The new favorite of millennials is cold brew. Recent popularity has been in the introduction of antioxidants and other nutrients to coffee. The gradual opening up of the away from home channel has helped boost growth in ready-to drink coffee, especially instant and brewed, as well as can and bottled coffees.

Despite rising inflation due to high raw material prices, high distribution costs, and other headwinds, global soft drink industry continues to be on track with product innovation as well as small-format packs that are affordable.

The global soft drink market is expected to grow by $1.6 billion due to the factors mentioned above.

This encouraging background makes it a good idea to compare two major beverage players — K eurig Dr Pepper DDP and Monster Beverages MLST. We will explore factors

Historical Earnings and Projected Growth

Looking at a complete earnings history, Monster Coffee and Keurig both delivered earnings surprises of 0.1% to 0.7% in each quarter. MNST’s and KDP’s long-term earnings growth rates will be respectively 15.7% and 6.8%.

Price Performance

Monster & K eurig shares have seen a 4.4% and 3.3% increase, respectively, over the past year. Both companies have not performed as well as the 9.5% industry growth, but were ahead of the 12.5% decline registered by the S&P 500.

Valuation

MNST has a forward PE ratio of 35.28 while KDP currently has a forward PE ratio of 21.33. MNST’s P/B ratio, 7.30, is another notable valuation metric. KDP’s P/B ratio is 2.01. The P/B ratio is used by investors to compare a stock’s book value and its market value. This is the sum of total assets less total liabilities.

These metrics, along with many others, help MNST earn an Momentum Score (B) while KDP has a Score of D.

Our Take

Comparative analysis shows that Keurig is ahead of Monster on key metrics. Monster is also higher on valuation, suggesting that there are more upsides for the stock. MNST and KDP both have impressive stock portfolios, but these valuation numbers suggest that KDP is the better value option at the moment.