PEPSICO INC (PEP) Stock Fundamental Analysis
NASDAQ:PEP - Nasdaq - US7134481081 - Common Stock - Currency: USD
PEP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. PEP scores excellent on profitability, but there are concerns on its financial health. PEP has a expensive valuation and it also scores bad on growth. Finally PEP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
PEP had positive earnings in the past year.
In the past year PEP had a positive cash flow from operations.
Each year in the past 5 years PEP has been profitable.
Each year in the past 5 years PEP had a positive operating cash flow.
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 72.41% of the companies in the same industry.
The Return On Equity of PEP (53.09%) is better than 96.55% of its industry peers.
The Return On Invested Capital of PEP (17.42%) is better than 89.66% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PEP is above the industry average of 13.22%.
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
The Profit Margin of PEP (10.43%) is better than 68.97% of its industry peers.
In the last couple of years the Profit Margin of PEP has remained more or less at the same level.
PEP has a Operating Margin of 16.03%. This is comparable to the rest of the industry: PEP outperforms 51.72% of its industry peers.
PEP's Operating Margin has been stable in the last couple of years.
PEP has a better Gross Margin (55.13%) than 72.41% 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
PEP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, PEP has about the same amount of shares outstanding.
Compared to 5 years ago, PEP has less shares outstanding
PEP has a worse debt/assets ratio than last year.
2.2 Solvency
PEP has an Altman-Z score of 3.91. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PEP (3.91) is better than 62.07% of its industry peers.
PEP has a debt to FCF ratio of 6.16. This is a slightly negative value and a sign of low solvency as PEP would need 6.16 years to pay back of all of its debts.
PEP has a Debt to FCF ratio of 6.16. This is in the better half of the industry: PEP outperforms 62.07% 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.
PEP has a worse Debt to Equity ratio (2.06) than 86.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 6.16 | ||
| Altman-Z | 3.91 |
ROIC/WACC2.21
WACC7.89%
2.3 Liquidity
A Current Ratio of 0.82 indicates that PEP may have some problems paying 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 75.86% 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 worse than 65.52% of its industry peers.
| 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.
PEP shows a small growth in Revenue. In the last year, the Revenue has grown by 0.42%.
Measured over the past years, PEP shows a small growth in Revenue. The Revenue has been growing by 6.46% on average per year.
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
The Earnings Per Share is expected to grow by 6.31% on average over the next years.
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-0.05%
Revenue Next 2Y1.77%
Revenue Next 3Y2.46%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 19.12 indicates a rather expensive valuation of PEP.
62.07% 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 29.75.
With a Price/Forward Earnings ratio of 18.63, PEP is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PEP is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.44, PEP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.12 | ||
| Fwd PE | 18.63 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PEP is on the same level as its industry peers.
PEP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.76 | ||
| EV/EBITDA | 13.2 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PEP does not grow enough to justify the current Price/Earnings ratio.
PEP has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)7.26
PEG (5Y)2.35
EPS Next 2Y4.51%
EPS Next 3Y5.12%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 3.57%.
Compared to an average industry Dividend Yield of 3.17, PEP pays a better dividend. On top of this PEP pays more dividend than 82.76% of the companies listed in the same industry.
PEP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
5.2 History
The dividend of PEP is nicely growing with an annual growth rate of 6.80%!
PEP has paid a dividend for at least 10 years, which is a reliable track record.
PEP has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.8%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
75.48% of the earnings are spent on dividend by PEP. 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%
155.99
+2.52 (+1.64%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.71%
Inst Owner Change2.14%
Ins Owners0.15%
Ins Owner Change0.5%
Market Cap213.94B
Analysts72.14
Price Target166.95 (7.03%)
Short Float %1.24%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
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)-6.31%
PT rev (3m)-10.37%
EPS NQ rev (1m)-7.34%
EPS NQ rev (3m)-8.51%
EPS NY rev (1m)-3.01%
EPS NY rev (3m)-3.97%
Revenue NQ rev (1m)-2.76%
Revenue NQ rev (3m)-3.79%
Revenue NY rev (1m)-2.71%
Revenue NY rev (3m)-3.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.12 | ||
| Fwd PE | 18.63 | ||
| P/S | 2.33 | ||
| P/FCF | 29.76 | ||
| P/OCF | 17.11 | ||
| P/B | 11.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.2 |
EPS(TTM)8.16
EY5.23%
EPS(NY)8.37
Fwd EY5.37%
FCF(TTM)5.24
FCFY3.36%
OCF(TTM)9.12
OCFY5.85%
SpS66.97
BVpS13.15
TBVpS-10.42
PEG (NY)7.26
PEG (5Y)2.35
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 | 3.91 |
F-Score7
WACC7.89%
ROIC/WACC2.21
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-0.05%
Revenue Next 2Y1.77%
Revenue Next 3Y2.46%
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%