RC Cola or Bleach With a 3.5% Dividend Yield? Dr. Pepper Snapple vs. Clorox

Dr Pepper Snapple Group Payout Ratio TTM Chart

Dr Pepper Snapple Group Payout Ratio TTM Chart by YCharts

Everyone’s hunting for income in this low-interest-rate world of ours, and finding dividend-paying stocks to consider is as easy as firing up the YCharts Stock Screener. In this case we looked at companies with market caps of $1 billion to $10 billion and flipped past pages of iffy names to land on Clorox (CLX), a tried-and-true consumer products maker, and Dr. Pepper Snapple (DPS), a catch-all for beverage cast-offs. You could do worse, and the two have some financial similarities. Clorox’s market cap is roughly equal to Dr. Pepper’s market cap, in the $9 billion range. Clorox’s PE and Dr. Pepper’s PE are each within shouting distance of 15. And Clorox’s revenue growth and Dr. Pepper’s revenue growth are single-digit affairs in very mature markets. In other words, they’re dividend stocks. Clorox is paying a bit more of its profit out in dividends, so Dr. Pepper may have more immediate room to lift its payout. But let’s be careful out there: income is nice, but you’re also buying the underlying stock. Read up.

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