Boston Beer (NYSE:SAM) & Keurig Dr Pepper (NASDAQ:KDP) Critical Analysis

Boston Beer (NYSE:SAM) and Keurig Dr Pepper (NASDAQ:KDP) are both consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Institutional & Insider Ownership

81.1% of Boston Beer shares are held by institutional investors. Comparatively, 94.0% of Keurig Dr Pepper shares are held by institutional investors. 27.4% of Boston Beer shares are held by company insiders. Comparatively, 0.3% of Keurig Dr Pepper shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Boston Beer and Keurig Dr Pepper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Boston Beer	-3.42%	9.99%	6.48%
Keurig Dr Pepper	7.10%	10.80%	4.36%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Boston Beer and Keurig Dr Pepper, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boston Beer	3	8	1	0	1.83
Keurig Dr Pepper	0	8	10	0	2.56

Boston Beer presently has a consensus price target of $206.91, suggesting a potential upside of 13.59%. Keurig Dr Pepper has a consensus price target of $34.75, suggesting a potential upside of 14.76%. Given Keurig Dr Pepper’s stronger consensus rating and higher possible upside, analysts clearly believe Keurig Dr Pepper is more favorable than Boston Beer.

Valuation & Earnings

This table compares Boston Beer and Keurig Dr Pepper”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boston Beer	$2.09 billion	0.91	$108.47 million	($6.79)	-26.83
Keurig Dr Pepper	$16.60 billion	2.48	$2.08 billion	$0.99	30.59

Keurig Dr Pepper has higher revenue and earnings than Boston Beer. Boston Beer is trading at a lower price-to-earnings ratio than Keurig Dr Pepper, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Boston Beer has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Keurig Dr Pepper has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.

Summary

Keurig Dr Pepper beats Boston Beer on 11 of the 14 factors compared between the two stocks.

About Boston Beer

The Boston Beer Company, Inc produces and sells alcohol beverages primarily in the United States. The company's flagship beer is Samuel Adams Boston Lager. It offers various beers, hard ciders, flavored malt beverages, and hard seltzers under the Samuel Adams, Twisted Tea, Truly, Angry Orchard, Dogfish Head, Angel City, and Coney Island brand names. The company markets and sells its products to a network wholesaler in the United States, as well as wholesalers, importers, or other agencies that in turn sell to retailers, such as grocery stores, club stores, convenience stores, liquor stores, bars, restaurants, stadiums, and other e-commerce retail outlets. It sells its products in Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America. The Boston Beer Company, Inc. was founded in 1984 and is based in Boston, Massachusetts.

About Keurig Dr Pepper

Keurig Dr Pepper Inc. owns, manufactures, and distributors beverages and single serve brewing systems in the United States and internationally. It operates through three segments: U.S. Refreshment Beverages, U.S. Coffee, and International. The U.S. Refreshment Beverages segment manufactures and distributes branded concentrates, syrup, and finished beverages. Its U.S. Coffee segment offers finished goods relating to K-Cup pods, single serve brewers, specialty coffee, and ready to drink coffee products through Keurig.com website. The International segment provides sales in Canada, Mexico, the Caribbean, and other international markets from the manufacture and distribution of branded concentrates, syrup, and finished beverages; and sales in Canada from the manufacture and distribution of finished goods relating to the Company's single serve brewers, KCup pods, and other coffee products. It serves retailers, third-party bottlers and distributors, retail partners, hotel chains, office coffee distributors, and end-use consumers. The company offers its products under the Dr Pepper, Canada Dry, Green Mountain Coffee Roasters, Snapple, Mott's, The Original Donut Shop, Clamato, and Core Hydration brand name. Keurig Dr Pepper Inc. was founded in 1981 and is headquartered in Burlington, Massachusetts.