PEPSICO INC (PEP) Stock Fundamental Analysis
NASDAQ:PEP - Nasdaq - US7134481081 - Common Stock - Currency: USD
Taking everything into account, PEP scores 5 out of 10 in our fundamental rating. PEP was compared to 32 industry peers in the Beverages industry. PEP has an excellent profitability rating, but there are concerns on its financial health. PEP has a valuation in line with the averages, but it does not seem to be growing. 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.
PEP had positive earnings in each of the past 5 years.
PEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of PEP (9.21%) is better than 71.88% of its industry peers.
PEP's Return On Equity of 50.95% is amongst the best of the industry. PEP outperforms 100.00% of its industry peers.
PEP's Return On Invested Capital of 16.68% is amongst the best of the industry. PEP outperforms 87.50% of its industry peers.
PEP had an Average Return On Invested Capital over the past 3 years of 15.79%. This is above the industry average of 11.57%.
The 3 year average ROIC (15.79%) for PEP is below the current ROIC(16.68%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.21% | ||
| ROE | 50.95% | ||
| ROIC | 16.68% |
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 (10.24%) is better than 75.00% of its industry peers.
PEP's Profit Margin has been stable in the last couple of years.
PEP's Operating Margin of 15.92% is fine compared to the rest of the industry. PEP outperforms 65.63% of its industry peers.
PEP's Operating Margin has been stable in the last couple of years.
PEP has a Gross Margin of 55.13%. This is in the better half of the industry: PEP outperforms 71.88% 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 | 15.92% | ||
| PM (TTM) | 10.24% | ||
| 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.
Compared to 1 year ago, PEP has about the same amount of shares outstanding.
Compared to 5 years ago, PEP has less shares outstanding
Compared to 1 year ago, PEP has a worse debt to assets ratio.
2.2 Solvency
PEP has an Altman-Z score of 3.65. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
PEP's Altman-Z score of 3.65 is fine compared to the rest of the industry. PEP outperforms 65.63% of its industry peers.
PEP has a debt to FCF ratio of 6.68. This is a slightly negative value and a sign of low solvency as PEP would need 6.68 years to pay back of all of its debts.
PEP has a Debt to FCF ratio (6.68) which is in line with its industry peers.
A Debt/Equity ratio of 2.14 is on the high side and indicates that PEP has dependencies on debt financing.
With a Debt to Equity ratio value of 2.14, PEP is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 3.65 |
ROIC/WACC2.13
WACC7.82%
2.3 Liquidity
PEP has a Current Ratio of 0.83. 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 Current ratio of PEP (0.83) is worse than 75.00% of its industry peers.
A Quick Ratio of 0.65 indicates that PEP may have some problems paying its short term obligations.
With a Quick ratio value of 0.65, PEP is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.88% over the past year.
PEP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.13% yearly.
Looking at the last year, PEP shows a decrease in Revenue. The Revenue has decreased by -0.38% in the last year.
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)3.88%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-8.07%
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-1.81%
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 3.50% on average per year.
The Revenue is expected to grow by 2.85% on average over the next years.
EPS Next Y-2.38%
EPS Next 2Y1.75%
EPS Next 3Y3.2%
EPS Next 5Y3.5%
Revenue Next Year-0.27%
Revenue Next 2Y1.41%
Revenue Next 3Y2.11%
Revenue Next 5Y2.85%
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
A Price/Earnings ratio of 16.84 indicates a correct valuation of PEP.
Based on the Price/Earnings ratio, PEP is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of PEP to the average of the S&P500 Index (27.30), we can say PEP is valued slightly cheaper.
The Price/Forward Earnings ratio is 16.01, which indicates a correct valuation of PEP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PEP indicates a somewhat cheap valuation: PEP is cheaper than 75.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, PEP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.84 | ||
| Fwd PE | 16.01 |
4.2 Price Multiples
62.50% of the companies in the same industry are more expensive than PEP, based on the Enterprise Value to EBITDA ratio.
PEP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PEP is cheaper than 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.52 | ||
| EV/EBITDA | 12.26 |
4.3 Compensation for Growth
PEP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.07
EPS Next 2Y1.75%
EPS Next 3Y3.2%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 4.44%, which is a nice return.
PEP's Dividend Yield is rather good when compared to the industry average which is at 3.03. PEP pays more dividend than 93.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, PEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.44% |
5.2 History
The dividend of PEP is nicely growing with an annual growth rate of 6.80%!
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 Years34
Div Non Decr Years34
5.3 Sustainability
78.38% of the earnings are spent on dividend by PEP. This is not a sustainable payout ratio.
The dividend of PEP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP78.38%
EPS Next 2Y1.75%
EPS Next 3Y3.2%
135.26
-0.82 (-0.6%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.94%
Inst Owner Change0.01%
Ins Owners0.17%
Ins Owner Change2.12%
Market Cap185.45B
Analysts67.14
Price Target151.9 (12.3%)
Short Float %1.2%
Short Ratio1.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.44% |
Yearly Dividend5.27
Dividend Growth(5Y)6.8%
DP78.38%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.74%
Min EPS beat(2)-1.39%
Max EPS beat(2)-0.08%
EPS beat(4)1
Avg EPS beat(4)0.77%
Min EPS beat(4)-1.39%
Max EPS beat(4)4.63%
EPS beat(8)5
Avg EPS beat(8)2.43%
EPS beat(12)9
Avg EPS beat(12)3.2%
EPS beat(16)12
Avg EPS beat(16)3.45%
Revenue beat(2)0
Avg Revenue beat(2)-0.76%
Min Revenue beat(2)-1.36%
Max Revenue beat(2)-0.16%
Revenue beat(4)0
Avg Revenue beat(4)-1.4%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)-0.16%
Revenue beat(8)1
Avg Revenue beat(8)-0.95%
Revenue beat(12)5
Avg Revenue beat(12)0.45%
Revenue beat(16)9
Avg Revenue beat(16)1.3%
PT rev (1m)-1.04%
PT rev (3m)-8.53%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-11.94%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)-4.83%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)-0.33%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.84 | ||
| Fwd PE | 16.01 | ||
| P/S | 2.03 | ||
| P/FCF | 25.52 | ||
| P/OCF | 14.75 | ||
| P/B | 10.08 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.26 |
EPS(TTM)8.03
EY5.94%
EPS(NY)8.45
Fwd EY6.25%
FCF(TTM)5.3
FCFY3.92%
OCF(TTM)9.17
OCFY6.78%
SpS66.75
BVpS13.41
TBVpS-11.19
PEG (NY)N/A
PEG (5Y)2.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.21% | ||
| ROE | 50.95% | ||
| ROCE | 20.75% | ||
| ROIC | 16.68% | ||
| ROICexc | 19% | ||
| ROICexgc | 41.96% | ||
| OM | 15.92% | ||
| PM (TTM) | 10.24% | ||
| GM | 55.13% | ||
| FCFM | 7.94% |
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-Score6
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 6.68 | ||
| Debt/EBITDA | 2.14 | ||
| Cap/Depr | 136.92% | ||
| Cap/Sales | 5.8% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.16% | ||
| Profit Quality | 77.57% | ||
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.65 | ||
| Altman-Z | 3.65 |
F-Score6
WACC7.82%
ROIC/WACC2.13
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)3.88%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-8.07%
EPS Next Y-2.38%
EPS Next 2Y1.75%
EPS Next 3Y3.2%
EPS Next 5Y3.5%
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-1.81%
Revenue Next Year-0.27%
Revenue Next 2Y1.41%
Revenue Next 3Y2.11%
Revenue Next 5Y2.85%
EBIT growth 1Y4.95%
EBIT growth 3Y8.98%
EBIT growth 5Y6.67%
EBIT Next Year20.6%
EBIT Next 3Y10.35%
EBIT Next 5Y7.49%
FCF growth 1Y36.44%
FCF growth 3Y0.94%
FCF growth 5Y5.82%
OCF growth 1Y18.71%
OCF growth 3Y2.49%
OCF growth 5Y5.33%