PEPSICO INC (PEP.DE) Stock Fundamental Analysis
FRA:PEP - Deutsche Boerse Ag - US7134481081 - Common Stock - Currency: EUR
We assign a fundamental rating of 5 out of 10 to PEP. PEP was compared to 25 industry peers in the Beverages industry. While PEP belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PEP has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
PEP had positive earnings in the past year.
PEP had a positive operating cash flow in the past year.
Each year in the past 5 years PEP has been profitable.
PEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.63%, PEP belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
PEP has a better Return On Equity (53.09%) than 100.00% of its industry peers.
PEP's Return On Invested Capital of 17.42% is amongst the best of the industry. PEP outperforms 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PEP is significantly above the industry average of 7.88%.
The 3 year average ROIC (15.79%) for PEP is below the current ROIC(17.42%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.63% | ||
| ROE | 53.09% | ||
| ROIC | 17.42% |
ROA(3y)9.44%
ROA(5y)8.85%
ROE(3y)51.36%
ROE(5y)50.9%
ROIC(3y)15.79%
ROIC(5y)14.66%
1.3 Margins
PEP's Profit Margin of 10.43% is fine compared to the rest of the industry. PEP outperforms 72.00% of its industry peers.
PEP's Profit Margin has been stable in the last couple of years.
With a Operating Margin value of 16.03%, PEP perfoms like the industry average, outperforming 48.00% of the companies in the same industry.
In the last couple of years the Operating Margin of PEP has remained more or less at the same level.
PEP has a Gross Margin of 55.13%. This is in the better half of the industry: PEP outperforms 64.00% of its industry peers.
In the last couple of years the Gross Margin of PEP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.03% | ||
| PM (TTM) | 10.43% | ||
| GM | 55.13% |
OM growth 3Y3.85%
OM growth 5Y0.2%
PM growth 3Y2.85%
PM growth 5Y-0.86%
GM growth 3Y1.08%
GM growth 5Y-0.08%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PEP is creating value.
The number of shares outstanding for PEP remains at a similar level compared to 1 year ago.
PEP has less shares outstanding than it did 5 years ago.
PEP has a worse debt/assets ratio than last year.
2.2 Solvency
PEP has an Altman-Z score of 3.94. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 3.94, PEP belongs to the best of the industry, outperforming 84.00% of the companies in the same industry.
The Debt to FCF ratio of PEP is 6.16, which is on the high side as it means it would take PEP, 6.16 years of fcf income to pay off all of its debts.
PEP has a better Debt to FCF ratio (6.16) than 80.00% of its industry peers.
A Debt/Equity ratio of 2.06 is on the high side and indicates that PEP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.06, PEP is doing worse than 84.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 6.16 | ||
| Altman-Z | 3.94 |
ROIC/WACC2.2
WACC7.92%
2.3 Liquidity
PEP has a Current Ratio of 0.82. This is a bad value and indicates that PEP is not financially healthy enough and could expect problems in meeting its short term obligations.
PEP's Current ratio of 0.82 is on the low side compared to the rest of the industry. PEP is outperformed by 60.00% of its industry peers.
PEP has a Quick Ratio of 0.82. This is a bad value and indicates that PEP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PEP (0.65) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.09% over the past year.
The Earnings Per Share has been growing by 8.13% on average over the past years. This is quite good.
The Revenue has been growing slightly by 0.42% in the past year.
PEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.46% yearly.
EPS 1Y (TTM)7.09%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%10.11%
Revenue 1Y (TTM)0.42%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-0.24%
3.2 Future
PEP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.31% yearly.
The Revenue is expected to grow by 4.76% on average over the next years.
EPS Next Y2.63%
EPS Next 2Y4.51%
EPS Next 3Y5.12%
EPS Next 5Y6.31%
Revenue Next Year-0.15%
Revenue Next 2Y1.72%
Revenue Next 3Y2.44%
Revenue Next 5Y4.76%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PEP is valuated rather expensively with a Price/Earnings ratio of 18.97.
PEP's Price/Earnings ratio is in line with the industry average.
PEP is valuated rather cheaply when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 18.49, the valuation of PEP can be described as rather expensive.
68.00% of the companies in the same industry are cheaper than PEP, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of PEP to the average of the S&P500 Index (22.10), we can say PEP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.97 | ||
| Fwd PE | 18.49 |
4.2 Price Multiples
PEP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. PEP is more expensive than 68.00% of the companies in the same industry.
PEP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.54 | ||
| EV/EBITDA | 13.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of PEP may justify a higher PE ratio.
PEG (NY)7.2
PEG (5Y)2.33
EPS Next 2Y4.51%
EPS Next 3Y5.12%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.51%, PEP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.64, PEP pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.33, PEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.51% |
5.2 History
On average, the dividend of PEP grows each year by 6.80%, which is quite nice.
Dividend Growth(5Y)6.8%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
PEP pays out 75.48% of its income as dividend. This is not a sustainable payout ratio.
PEP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP75.48%
EPS Next 2Y4.51%
EPS Next 3Y5.12%
FRA:PEP (3/10/2025, 10:45:26 AM)
142.64
-1.48 (-1.03%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.71%
Inst Owner ChangeN/A
Ins Owners0.15%
Ins Owner ChangeN/A
Market Cap195.63B
Analysts70.71
Price Target159.9 (12.1%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.51% |
Yearly Dividend4.85
Dividend Growth(5Y)6.8%
DP75.48%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.08%
Min EPS beat(2)-0.08%
Max EPS beat(2)-0.08%
EPS beat(4)2
Avg EPS beat(4)2.37%
Min EPS beat(4)-0.08%
Max EPS beat(4)5.02%
EPS beat(8)6
Avg EPS beat(8)3.46%
EPS beat(12)10
Avg EPS beat(12)3.61%
EPS beat(16)13
Avg EPS beat(16)3.97%
Revenue beat(2)0
Avg Revenue beat(2)-2.08%
Min Revenue beat(2)-2.81%
Max Revenue beat(2)-1.36%
Revenue beat(4)0
Avg Revenue beat(4)-1.37%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)-0.02%
Revenue beat(8)2
Avg Revenue beat(8)-0.6%
Revenue beat(12)6
Avg Revenue beat(12)0.73%
Revenue beat(16)10
Avg Revenue beat(16)1.36%
PT rev (1m)-5.44%
PT rev (3m)-9.19%
EPS NQ rev (1m)-6.94%
EPS NQ rev (3m)-8.51%
EPS NY rev (1m)-3.01%
EPS NY rev (3m)-3.97%
Revenue NQ rev (1m)-1.97%
Revenue NQ rev (3m)-3.79%
Revenue NY rev (1m)-2.25%
Revenue NY rev (3m)-3.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.97 | ||
| Fwd PE | 18.49 | ||
| P/S | 2.31 | ||
| P/FCF | 29.54 | ||
| P/OCF | 16.98 | ||
| P/B | 11.77 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.42 |
EPS(TTM)7.52
EY5.27%
EPS(NY)7.71
Fwd EY5.41%
FCF(TTM)4.83
FCFY3.38%
OCF(TTM)8.4
OCFY5.89%
SpS61.69
BVpS12.12
TBVpS-9.6
PEG (NY)7.2
PEG (5Y)2.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.63% | ||
| ROE | 53.09% | ||
| ROCE | 21.67% | ||
| ROIC | 17.42% | ||
| ROICexc | 20.18% | ||
| ROICexgc | 44.95% | ||
| OM | 16.03% | ||
| PM (TTM) | 10.43% | ||
| GM | 55.13% | ||
| FCFM | 7.83% |
ROA(3y)9.44%
ROA(5y)8.85%
ROE(3y)51.36%
ROE(5y)50.9%
ROIC(3y)15.79%
ROIC(5y)14.66%
ROICexc(3y)17.92%
ROICexc(5y)16.59%
ROICexgc(3y)38.78%
ROICexgc(5y)38.65%
ROCE(3y)20.23%
ROCE(5y)18.63%
ROICexcg growth 3Y1.22%
ROICexcg growth 5Y-0.39%
ROICexc growth 3Y8.31%
ROICexc growth 5Y3.24%
OM growth 3Y3.85%
OM growth 5Y0.2%
PM growth 3Y2.85%
PM growth 5Y-0.86%
GM growth 3Y1.08%
GM growth 5Y-0.08%
F-Score7
Asset Turnover0.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 6.16 | ||
| Debt/EBITDA | 2.01 | ||
| Cap/Depr | 139.4% | ||
| Cap/Sales | 5.79% | ||
| Interest Coverage | 9.29 | ||
| Cash Conversion | 67.46% | ||
| Profit Quality | 75.06% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.65 | ||
| Altman-Z | 3.94 |
F-Score7
WACC7.92%
ROIC/WACC2.2
Cap/Depr(3y)151.67%
Cap/Depr(5y)153.05%
Cap/Sales(3y)5.95%
Cap/Sales(5y)5.94%
Profit Quality(3y)75.09%
Profit Quality(5y)81.31%
High Growth Momentum
Growth
EPS 1Y (TTM)7.09%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%10.11%
EPS Next Y2.63%
EPS Next 2Y4.51%
EPS Next 3Y5.12%
EPS Next 5Y6.31%
Revenue 1Y (TTM)0.42%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-0.24%
Revenue Next Year-0.15%
Revenue Next 2Y1.72%
Revenue Next 3Y2.44%
Revenue Next 5Y4.76%
EBIT growth 1Y7.31%
EBIT growth 3Y8.98%
EBIT growth 5Y6.67%
EBIT Next Year26.03%
EBIT Next 3Y12.44%
EBIT Next 5Y9.18%
FCF growth 1Y-9.28%
FCF growth 3Y0.94%
FCF growth 5Y5.82%
OCF growth 1Y-6.96%
OCF growth 3Y2.49%
OCF growth 5Y5.33%