The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Keurig Dr Pepper (NASDAQ:KDP). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Keurig Dr Pepper with the means to add long-term value to shareholders.

How Fast Is Keurig Dr Pepper Growing?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That means EPS growth is considered a real positive by most successful long-term investors. Keurig Dr Pepper managed to grow EPS by 11% per year, over three years. That growth rate is fairly good, assuming the company can keep it up.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The good news is that Keurig Dr Pepper is growing revenues, and EBIT margins improved by 3.0 percentage points to 23%, over the last year. Both of which are great metrics to check off for potential growth.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Keurig Dr Pepper's future profits.

Are Keurig Dr Pepper Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

Although we did see some insider selling (worth US$4.1m) this was overshadowed by a mountain of buying, totalling US$21m in just one year. This adds to the interest in Keurig Dr Pepper because it suggests that those who understand the company best, are optimistic. We also note that it was the company insider, G. Harf, who made the biggest single acquisition, paying US$5.0m for shares at about US$29.10 each.

On top of the insider buying, it's good to see that Keurig Dr Pepper insiders have a valuable investment in the business. We note that their impressive stake in the company is worth US$582m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Does Keurig Dr Pepper Deserve A Spot On Your Watchlist?

One important encouraging feature of Keurig Dr Pepper is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. What about risks? Every company has them, and we've spotted 2 warning signs for Keurig Dr Pepper (of which 1 can't be ignored!) you should know about.

Keen growth investors love to see insider activity. Thankfully, Keurig Dr Pepper isn't the only one. You can see a a curated list of companies which have exhibited consistent growth accompanied by high insider ownership.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.