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Keurig Dr Pepper (KDP) Unveils Strategic Refinancing Program
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To enhance its financial position, Keurig Dr Pepper (KDP - Free Report) recently announced a strategic refinancing program. The program is aimed at extending the company’s debt maturities and enhancing its liquidity position.
Keurig Dr Pepper has initiated a public offering of senior notes, subject to market and other customary conditions. The company expects to utilize net proceeds from the sale of the notes to repay short-term commercial paper notes and current borrowings under its existing revolving credit facilities.
Further, this renowned beverage company is refinancing and expanding its already existing revolving credit facility. Nevertheless, the company’s strategic refinancing plans are expected to keep its debt balance and deleveraging commitments unchanged.
We note that Keurig Dr Pepper is displaying strength on the back of robust cash flow generation, which enables it to significantly clear debts and boost shareholders’ value. In 2019, it generated operating cash flow of $2,474 million, with free cash flows of $2.4 billion. This resulted in an impressive free cash flow conversion rate of 140%.
Driven by strong cash flow, the company paid down structured payables of $531 million and reduced bank debt by $3.1 billion in 2019. Lowered debt and adjusted EBITDA growth resulted in a debt-to-adjusted EBITDA ratio (leverage ratio) of 4.5x at the end of 2019 compared with 5.4x at the end of 2018.
Apart from this, Keurig Dr Pepper’s continued focus on partnerships and acquisitions bode well. Moreover, the company is witnessing strong dollar consumption growth across majority of its portfolio with market share gains in several categories.
We note that shares of this Zacks Rank #3 (Hold) company have lost 4.4% in the past six months compared with the industry’s decline of 12.5%.
Church & Dwight (CHD - Free Report) has a long-term earnings growth rate of 8.2% and a Zacks Rank #2 (Buy).
Campbell Soup Company (CPB - Free Report) has a long-term earnings growth rate of 7.2% and a Zacks Rank #2.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
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Keurig Dr Pepper (KDP) Unveils Strategic Refinancing Program
To enhance its financial position, Keurig Dr Pepper (KDP - Free Report) recently announced a strategic refinancing program. The program is aimed at extending the company’s debt maturities and enhancing its liquidity position.
Keurig Dr Pepper has initiated a public offering of senior notes, subject to market and other customary conditions. The company expects to utilize net proceeds from the sale of the notes to repay short-term commercial paper notes and current borrowings under its existing revolving credit facilities.
Further, this renowned beverage company is refinancing and expanding its already existing revolving credit facility. Nevertheless, the company’s strategic refinancing plans are expected to keep its debt balance and deleveraging commitments unchanged.
We note that Keurig Dr Pepper is displaying strength on the back of robust cash flow generation, which enables it to significantly clear debts and boost shareholders’ value. In 2019, it generated operating cash flow of $2,474 million, with free cash flows of $2.4 billion. This resulted in an impressive free cash flow conversion rate of 140%.
Driven by strong cash flow, the company paid down structured payables of $531 million and reduced bank debt by $3.1 billion in 2019. Lowered debt and adjusted EBITDA growth resulted in a debt-to-adjusted EBITDA ratio (leverage ratio) of 4.5x at the end of 2019 compared with 5.4x at the end of 2018.
Apart from this, Keurig Dr Pepper’s continued focus on partnerships and acquisitions bode well. Moreover, the company is witnessing strong dollar consumption growth across majority of its portfolio with market share gains in several categories.
We note that shares of this Zacks Rank #3 (Hold) company have lost 4.4% in the past six months compared with the industry’s decline of 12.5%.
Top 3 Picks
The Clorox Company (CLX - Free Report) has a long-term earnings growth rate of 5.2% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Church & Dwight (CHD - Free Report) has a long-term earnings growth rate of 8.2% and a Zacks Rank #2 (Buy).
Campbell Soup Company (CPB - Free Report) has a long-term earnings growth rate of 7.2% and a Zacks Rank #2.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
See 5 Stocks Set to Double>>