PEPSICO INC (PEP)
US7134481081 - Common Stock
We assign a fundamental rating of 5 out of 10 to PEP. PEP was compared to 33 industry peers in the Beverages industry. While PEP has a great profitability rating, there are quite some concerns on its financial health. PEP is valued correctly, but it does not seem to be growing. Finally PEP also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year PEP was profitable.
In the past year PEP had a positive cash flow from operations.
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
The Return On Assets of PEP (9.31%) is better than 72.73% of its industry peers.
The Return On Equity of PEP (48.10%) is better than 96.97% of its industry peers.
The Return On Invested Capital of PEP (16.91%) is better than 90.91% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PEP is above the industry average of 13.01%.
The 3 year average ROIC (15.19%) for PEP is below the current ROIC(16.91%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.31% | ||
| ROE | 48.1% | ||
| ROIC | 16.91% |
ROA(3y)8.98%
ROA(5y)8.78%
ROE(3y)49.49%
ROE(5y)50.17%
ROIC(3y)15.19%
ROIC(5y)14.63%
1.3 Margins
PEP has a Profit Margin of 10.18%. This is in the better half of the industry: PEP outperforms 63.64% of its industry peers.
In the last couple of years the Profit Margin of PEP has declined.
With a decent Operating Margin value of 15.67%, PEP is doing good in the industry, outperforming 60.61% 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.
Looking at the Gross Margin, with a value of 55.04%, PEP is in the better half of the industry, outperforming 75.76% of the companies in the same industry.
PEP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.67% | ||
| PM (TTM) | 10.18% | ||
| GM | 55.04% |
OM growth 3Y-0.12%
OM growth 5Y-1.49%
PM growth 3Y-0.66%
PM growth 5Y-12.51%
GM growth 3Y-0.32%
GM growth 5Y-0.07%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PEP is creating value.
PEP has less shares outstanding than it did 1 year ago.
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
An Altman-Z score of 3.91 indicates that PEP is not in any danger for bankruptcy at the moment.
The Altman-Z score of PEP (3.91) is better than 66.67% of its industry peers.
PEP has a debt to FCF ratio of 7.26. This is a slightly negative value and a sign of low solvency as PEP would need 7.26 years to pay back of all of its debts.
PEP has a Debt to FCF ratio (7.26) which is in line with its industry peers.
PEP has a Debt/Equity ratio of 1.98. This is a high value indicating a heavy dependency on external financing.
PEP has a Debt to Equity ratio of 1.98. This is amonst the worse of the industry: PEP underperforms 84.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 7.26 | ||
| Altman-Z | 3.91 |
ROIC/WACC2.09
WACC8.1%
2.3 Liquidity
PEP has a Current Ratio of 0.89. 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 has a worse Current ratio (0.89) than 72.73% of its industry peers.
A Quick Ratio of 0.70 indicates that PEP may have some problems paying its short term obligations.
PEP has a Quick ratio (0.70) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
PEP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.26%.
The Earnings Per Share has been growing slightly by 6.16% on average over the past years.
The Revenue has been growing slightly by 0.33% in the past year.
The Revenue has been growing slightly by 7.18% on average over the past years.
EPS 1Y (TTM)6.26%
EPS 3Y11.35%
EPS 5Y6.16%
EPS Q2Q%2.67%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y9.13%
Revenue growth 5Y7.18%
Sales Q2Q%-0.57%
3.2 Future
The Earnings Per Share is expected to grow by 6.60% on average over the next years.
The Revenue is expected to grow by 3.39% on average over the next years.
EPS Next Y8.04%
EPS Next 2Y6.86%
EPS Next 3Y7.05%
EPS Next 5Y6.6%
Revenue Next Year0.18%
Revenue Next 2Y1.72%
Revenue Next 3Y2.44%
Revenue Next 5Y3.39%
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 stable.
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
With a Price/Earnings ratio of 19.15, PEP is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of PEP indicates a somewhat cheap valuation: PEP is cheaper than 63.64% of the companies listed in the same industry.
PEP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.54.
The Price/Forward Earnings ratio is 17.56, which indicates a rather expensive current 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 63.64% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of PEP to the average of the S&P500 Index (23.99), we can say PEP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.15 | ||
| Fwd PE | 17.56 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PEP is valued a bit cheaper than 60.61% 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 | 33.81 | ||
| EV/EBITDA | 13.71 |
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.
The decent profitability rating of PEP may justify a higher PE ratio.
PEG (NY)2.38
PEG (5Y)3.11
EPS Next 2Y6.86%
EPS Next 3Y7.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.58%, PEP has a reasonable but not impressive dividend return.
PEP's Dividend Yield is rather good when compared to the industry average which is at 3.05. PEP pays more dividend than 87.88% of the companies in the same industry.
PEP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
5.2 History
The dividend of PEP is nicely growing with an annual growth rate of 6.87%!
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)6.87%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
PEP pays out 75.99% 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.
DP75.99%
EPS Next 2Y6.86%
EPS Next 3Y7.05%
PEPSICO INC
NASDAQ:PEP (12/24/2024, 4:06:52 PM)
After market: 152.78 -0.03 (-0.02%)152.81
+1.52 (+1%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners77.58%
Inst Owner Change0.64%
Ins Owners0.15%
Ins Owner Change0.51%
Market Cap209.65B
Analysts71.11
Price Target186.25 (21.88%)
Short Float %1.43%
Short Ratio3.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
Dividend Growth(5Y)6.87%
DP75.99%
Div Incr Years33
Div Non Decr Years33
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.27%
Min EPS beat(2)-0.08%
Max EPS beat(2)4.63%
EPS beat(4)3
Avg EPS beat(4)3.02%
Min EPS beat(4)-0.08%
Max EPS beat(4)5.02%
EPS beat(8)7
Avg EPS beat(8)3.51%
EPS beat(12)10
Avg EPS beat(12)3.61%
EPS beat(16)13
Avg EPS beat(16)3.98%
Revenue beat(2)0
Avg Revenue beat(2)-2.05%
Min Revenue beat(2)-2.81%
Max Revenue beat(2)-1.3%
Revenue beat(4)0
Avg Revenue beat(4)-1.76%
Min Revenue beat(4)-2.91%
Max Revenue beat(4)-0.02%
Revenue beat(8)3
Avg Revenue beat(8)-0.02%
Revenue beat(12)7
Avg Revenue beat(12)1.1%
Revenue beat(16)11
Avg Revenue beat(16)1.57%
PT rev (1m)0%
PT rev (3m)0.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.15 | ||
| Fwd PE | 17.56 | ||
| P/S | 2.28 | ||
| P/FCF | 33.81 | ||
| P/OCF | 17.42 | ||
| P/B | 10.78 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.71 |
EPS(TTM)7.98
EY5.22%
EPS(NY)8.7
Fwd EY5.69%
FCF(TTM)4.52
FCFY2.96%
OCF(TTM)8.77
OCFY5.74%
SpS67
BVpS14.18
TBVpS-9.56
PEG (NY)2.38
PEG (5Y)3.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.31% | ||
| ROE | 48.1% | ||
| ROCE | 20.52% | ||
| ROIC | 16.91% | ||
| ROICexc | 19.1% | ||
| ROICexgc | 40.14% | ||
| OM | 15.67% | ||
| PM (TTM) | 10.18% | ||
| GM | 55.04% | ||
| FCFM | 6.75% |
ROA(3y)8.98%
ROA(5y)8.78%
ROE(3y)49.49%
ROE(5y)50.17%
ROIC(3y)15.19%
ROIC(5y)14.63%
ROICexc(3y)16.98%
ROICexc(5y)16.43%
ROICexgc(3y)39.28%
ROICexgc(5y)39.8%
ROCE(3y)18.74%
ROCE(5y)17.96%
ROICexcg growth 3Y0.19%
ROICexcg growth 5Y-6.16%
ROICexc growth 3Y8.4%
ROICexc growth 5Y-0.1%
OM growth 3Y-0.12%
OM growth 5Y-1.49%
PM growth 3Y-0.66%
PM growth 5Y-12.51%
GM growth 3Y-0.32%
GM growth 5Y-0.07%
F-Score7
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 7.26 | ||
| Debt/EBITDA | 2.15 | ||
| Cap/Depr | 165.14% | ||
| Cap/Sales | 6.34% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.09% | ||
| Profit Quality | 66.27% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 3.91 |
F-Score7
WACC8.1%
ROIC/WACC2.09
Cap/Depr(3y)182.1%
Cap/Depr(5y)177.34%
Cap/Sales(3y)5.96%
Cap/Sales(5y)6.04%
Profit Quality(3y)80.66%
Profit Quality(5y)81.11%
High Growth Momentum
Growth
EPS 1Y (TTM)6.26%
EPS 3Y11.35%
EPS 5Y6.16%
EPS Q2Q%2.67%
EPS Next Y8.04%
EPS Next 2Y6.86%
EPS Next 3Y7.05%
EPS Next 5Y6.6%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y9.13%
Revenue growth 5Y7.18%
Sales Q2Q%-0.57%
Revenue Next Year0.18%
Revenue Next 2Y1.72%
Revenue Next 3Y2.44%
Revenue Next 5Y3.39%
EBIT growth 1Y5.12%
EBIT growth 3Y9%
EBIT growth 5Y5.58%
EBIT Next Year28.95%
EBIT Next 3Y13.28%
EBIT Next 5Y9.89%
FCF growth 1Y-2.85%
FCF growth 3Y7.53%
FCF growth 5Y5.26%
OCF growth 1Y6.59%
OCF growth 3Y8.2%
OCF growth 5Y7.38%