PEPSICO INC (PEP) Stock Fundamental Analysis
NASDAQ:PEP - Nasdaq - US7134481081 - Common Stock - Currency: USD
PEP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. While PEP belongs to the best of the industry regarding profitability, there are concerns on its financial health. PEP is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year PEP was profitable.
PEP had a positive operating cash flow in the past year.
PEP had positive earnings in each of the past 5 years.
In the past 5 years PEP always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.63%, PEP is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
With an excellent Return On Equity value of 53.09%, PEP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Invested Capital of PEP (17.42%) is better than 90.63% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PEP is above the industry average of 12.12%.
The last Return On Invested Capital (17.42%) for PEP is above the 3 year average (15.79%), which is a sign of increasing profitability.
| 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 75.00% of its industry peers.
PEP's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 16.03%, PEP is in the better half of the industry, outperforming 62.50% 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 75.00% of its industry peers.
PEP's Gross Margin has been stable in the last couple of years.
| 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
PEP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for PEP remains at a similar level compared to 1 year ago.
Compared to 5 years ago, PEP has less shares outstanding
The debt/assets ratio for PEP is higher compared to a year ago.
2.2 Solvency
PEP has an Altman-Z score of 3.80. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
PEP has a better Altman-Z score (3.80) than 65.63% of its industry peers.
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.
The Debt to FCF ratio of PEP (6.16) is comparable to the rest of the industry.
A Debt/Equity ratio of 2.06 is on the high side and indicates that PEP has dependencies on debt financing.
PEP has a worse Debt to Equity ratio (2.06) than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 6.16 | ||
| Altman-Z | 3.8 |
ROIC/WACC2.22
WACC7.86%
2.3 Liquidity
A Current Ratio of 0.82 indicates that PEP may have some problems paying its short term obligations.
The Current ratio of PEP (0.82) is worse than 65.63% 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.
With a Quick ratio value of 0.65, PEP perfoms like the industry average, outperforming 43.75% of the companies in the same 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.
Looking at the last year, PEP shows a small growth in Revenue. The Revenue has grown by 0.42% in the last 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
Based on estimates for the next years, PEP will show a small growth in Earnings Per Share. The EPS will grow by 5.18% on average per year.
The Revenue is expected to grow by 4.00% on average over the next years.
EPS Next Y2.57%
EPS Next 2Y4.48%
EPS Next 3Y5.1%
EPS Next 5Y5.18%
Revenue Next Year-0.13%
Revenue Next 2Y1.74%
Revenue Next 3Y2.42%
Revenue Next 5Y4%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
The Price/Earnings ratio is 17.50, which indicates a rather expensive current valuation of PEP.
75.00% of the companies in the same industry are more expensive than PEP, based on the Price/Earnings ratio.
PEP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.29.
PEP is valuated rather expensively with a Price/Forward Earnings ratio of 17.07.
81.25% of the companies in the same industry are more expensive than PEP, based on the Price/Forward Earnings ratio.
PEP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.5 | ||
| Fwd PE | 17.07 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PEP indicates a somewhat cheap valuation: PEP is cheaper than 65.63% of the companies listed in the same industry.
PEP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PEP is cheaper than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.25 | ||
| EV/EBITDA | 12.42 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.82
PEG (5Y)2.15
EPS Next 2Y4.48%
EPS Next 3Y5.1%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 3.79%. Purely for dividend investing, there may be better candidates out there.
PEP's Dividend Yield is rather good when compared to the industry average which is at 3.08. PEP pays more dividend than 87.50% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, PEP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.79% |
5.2 History
On average, the dividend of PEP grows each year by 6.80%, which is quite nice.
PEP has been paying a dividend for at least 10 years, so it has a reliable track record.
PEP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.8%
Div Incr Years33
Div Non Decr Years33
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 2Y4.48%
EPS Next 3Y5.1%
142.84
+2.75 (+1.96%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.71%
Inst Owner Change0%
Ins Owners0.15%
Ins Owner Change2%
Market Cap195.91B
Analysts68.57
Price Target166.07 (16.26%)
Short Float %1.53%
Short Ratio2.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.79% |
Yearly Dividend5.27
Dividend Growth(5Y)6.8%
DP75.48%
Div Incr Years33
Div Non Decr Years33
Ex-Date
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)-0.49%
PT rev (3m)-10.44%
EPS NQ rev (1m)-1.16%
EPS NQ rev (3m)-10.24%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)-3.81%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-4.02%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-3.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.5 | ||
| Fwd PE | 17.07 | ||
| P/S | 2.13 | ||
| P/FCF | 27.25 | ||
| P/OCF | 15.66 | ||
| P/B | 10.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.42 |
EPS(TTM)8.16
EY5.71%
EPS(NY)8.37
Fwd EY5.86%
FCF(TTM)5.24
FCFY3.67%
OCF(TTM)9.12
OCFY6.38%
SpS66.97
BVpS13.15
TBVpS-10.42
PEG (NY)6.82
PEG (5Y)2.15
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 | 3.8 |
F-Score7
WACC7.86%
ROIC/WACC2.22
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 Y2.57%
EPS Next 2Y4.48%
EPS Next 3Y5.1%
EPS Next 5Y5.18%
Revenue 1Y (TTM)0.42%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-0.24%
Revenue Next Year-0.13%
Revenue Next 2Y1.74%
Revenue Next 3Y2.42%
Revenue Next 5Y4%
EBIT growth 1Y7.31%
EBIT growth 3Y8.98%
EBIT growth 5Y6.67%
EBIT Next Year23.96%
EBIT Next 3Y11.41%
EBIT Next 5Y8.71%
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%