Is DPS waaaaay overpriced? Varchild still thinks so
Despite seeing the stock rally a lot and hold into a range of $34 - $36.... I really do not see how the stock trades where it is....
The only reason it is in the Mid 30s here is because of 2 things...
Euphoria over the Pepsi/Coca Cola deal pushing the P/E multiple from 13 to roughly 16 times earnings. Investors are paying MUCH MORE for DPS earnings.
I am not a big fan of throwing in Dividend + Cash to value how much I want to pay for a stock in multiple. My analysis is simply EARNINGS = Multiple.
Top of the Range for DPS earnings this year? $2.30.
Which gives us a range of $34 - 37.00 for a multiple of 13 - 16.
So....uhm....why exactly are analysts predicting DPS at mid-40s this year?
I think DPS is basically stuck in the range it is in until next year if next year's earnings are greater than this year.