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 scores excellent on profitability, but there are concerns on its financial health. PEP has a valuation in line with the averages, but on the other hand it 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.
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
With a decent Return On Assets value of 9.31%, PEP is doing good in the industry, outperforming 68.97% of the companies in the same industry.
PEP's Return On Equity of 48.10% is amongst the best of the industry. PEP outperforms 96.55% of its industry peers.
PEP has a Return On Invested Capital of 16.91%. This is amongst the best in the industry. PEP outperforms 89.66% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PEP is in line with the industry average of 13.25%.
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
The Profit Margin of PEP (10.18%) is better than 62.07% of its industry peers.
In the last couple of years the Profit Margin of PEP has declined.
PEP has a Operating Margin (15.67%) which is comparable to the rest of the 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 55.04%. This is in the better half of the industry: PEP outperforms 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 | 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
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 has been reduced 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
An Altman-Z score of 3.90 indicates that PEP is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.90, PEP is doing good in the industry, outperforming 62.07% of the companies in the same industry.
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.
A Debt/Equity ratio of 1.98 is on the high side and indicates that PEP has dependencies on debt financing.
With a Debt to Equity ratio value of 1.98, PEP is not doing good in the industry: 86.21% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.98 | ||
| Debt/FCF | 7.26 | ||
| Altman-Z | 3.9 |
ROIC/WACC2.09
WACC8.09%
2.3 Liquidity
A Current Ratio of 0.89 indicates that PEP may have some problems paying its short term obligations.
PEP has a Current ratio of 0.89. This is in the lower half of the industry: PEP underperforms 72.41% of its industry peers.
PEP has a Quick 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.
Looking at the Quick ratio, with a value of 0.70, PEP is in line with its industry, outperforming 41.38% of the companies in the same industry.
| 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.
Looking at the last year, PEP shows a small growth in Revenue. The Revenue has grown by 0.33% in the last 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
Based on estimates for the next years, PEP will show a small growth in Earnings Per Share. The EPS will grow by 6.54% on average per year.
PEP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.32% yearly.
EPS Next Y8.04%
EPS Next 2Y6.86%
EPS Next 3Y7.05%
EPS Next 5Y6.54%
Revenue Next Year0.13%
Revenue Next 2Y1.4%
Revenue Next 3Y2.23%
Revenue Next 5Y3.32%
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.
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 18.88, which indicates a rather expensive current valuation of PEP.
65.52% of the companies in the same industry are more expensive than PEP, based on the Price/Earnings ratio.
PEP is valuated rather cheaply when we compare the Price/Earnings ratio to 28.46, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 17.32, the valuation of PEP can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as PEP.
Compared to an average S&P500 Price/Forward Earnings ratio of 92.56, PEP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.88 | ||
| Fwd PE | 17.32 |
4.2 Price Multiples
PEP's Enterprise Value to EBITDA ratio is in line with the industry average.
PEP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.34 | ||
| EV/EBITDA | 13.64 |
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 decent profitability rating of PEP may justify a higher PE ratio.
PEG (NY)2.35
PEG (5Y)3.06
EPS Next 2Y6.86%
EPS Next 3Y7.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.65%, PEP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.21, PEP pays a better dividend. On top of this PEP pays more dividend than 86.21% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, PEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.65% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
The dividend of PEP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP75.99%
EPS Next 2Y6.86%
EPS Next 3Y7.05%
PEPSICO INC
NASDAQ:PEP (1/31/2025, 8:00:00 PM)
After market: 150.39 -0.3 (-0.2%)150.69
-1.21 (-0.8%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners77.58%
Inst Owner Change-0.48%
Ins Owners0.15%
Ins Owner Change0.51%
Market Cap206.75B
Analysts71.85
Price Target185.43 (23.05%)
Short Float %1.47%
Short Ratio3.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.65% |
Yearly Dividend4.86
Dividend Growth(5Y)6.87%
DP75.99%
Div Incr Years33
Div Non Decr Years33
Ex-DateN/A
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)-0.44%
PT rev (3m)-0.44%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-1.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.88 | ||
| Fwd PE | 17.32 | ||
| P/S | 2.25 | ||
| P/FCF | 33.34 | ||
| P/OCF | 17.18 | ||
| P/B | 10.63 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.64 |
EPS(TTM)7.98
EY5.3%
EPS(NY)8.7
Fwd EY5.77%
FCF(TTM)4.52
FCFY3%
OCF(TTM)8.77
OCFY5.82%
SpS67
BVpS14.18
TBVpS-9.56
PEG (NY)2.35
PEG (5Y)3.06
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 | 3.9 |
F-Score7
WACC8.09%
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 5Y6.54%
Revenue 1Y (TTM)0.33%
Revenue growth 3Y9.13%
Revenue growth 5Y7.18%
Sales Q2Q%-0.57%
Revenue Next Year0.13%
Revenue Next 2Y1.4%
Revenue Next 3Y2.23%
Revenue Next 5Y3.32%
EBIT growth 1Y5.12%
EBIT growth 3Y9%
EBIT growth 5Y5.58%
EBIT Next Year28.92%
EBIT Next 3Y13.09%
EBIT Next 5Y9.83%
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%