145.87 USD
+1.29 (+0.89%)
145.29 USD
-0.58 (-0.4%)
Overall PEP gets a fundamental rating of 4 out of 10. We evaluated PEP against 32 industry peers in the Beverages industry. PEP has an excellent profitability rating, but there are concerns on its financial health. PEP is valued expensive and 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.
- In the past 5 years PEP has always been profitable.
- PEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- PEP has a Return On Assets (6.78%) which is in line with its industry peers.
- PEP's Return On Equity of 37.26% is amongst the best of the industry. PEP outperforms 90.63% of its industry peers.
- PEP has a Return On Invested Capital of 15.32%. This is amongst the best in the industry. PEP outperforms 84.38% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for PEP is above the industry average of 11.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.78% | ||
| ROE | 37.26% | ||
| ROIC | 15.32% |
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 (7.82%) is comparable to the rest of the industry.
- PEP's Profit Margin has been stable in the last couple of years.
- Looking at the Operating Margin, with a value of 15.49%, PEP is in the better half of the industry, outperforming 68.75% 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.
- With a decent Gross Margin value of 54.50%, PEP is doing good in the industry, outperforming 65.63% of the companies in the same industry.
- 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 | 15.49% | ||
| PM (TTM) | 7.82% | ||
| GM | 54.5% |
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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PEP 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
- PEP has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.60 indicates that PEP is not in any danger for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 3.60, PEP is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
- PEP has a debt to FCF ratio of 7.49. This is a slightly negative value and a sign of low solvency as PEP would need 7.49 years to pay back of all of its debts.
- PEP has a Debt to FCF ratio (7.49) which is comparable to the rest of the industry.
- PEP has a Debt/Equity ratio of 2.28. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 2.28, PEP is not doing good in the industry: 90.63% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 7.49 | ||
| Altman-Z | 3.6 |
ROIC/WACC1.97
WACC7.79%
2.3 Liquidity
- A Current Ratio of 0.91 indicates that PEP may have some problems paying its short term obligations.
- PEP's Current ratio of 0.91 is on the low side compared to the rest of the industry. PEP is outperformed by 75.00% of its industry peers.
- A Quick Ratio of 0.72 indicates that PEP may have some problems paying its short term obligations.
- With a Quick ratio value of 0.72, PEP perfoms like the industry average, outperforming 46.88% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
- PEP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.63%.
- Measured over the past years, PEP shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.13% on average per year.
- The Revenue has been growing slightly by 0.49% in the past 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)-1.63%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-0.87%
Revenue 1Y (TTM)0.49%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%2.65%
3.2 Future
- PEP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.75% yearly.
- The Revenue is expected to grow by 2.97% on average over the next years.
EPS Next Y0.42%
EPS Next 2Y2.84%
EPS Next 3Y3.8%
EPS Next 5Y3.75%
Revenue Next Year1.4%
Revenue Next 2Y2.62%
Revenue Next 3Y2.82%
Revenue Next 5Y2.97%
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 18.58, which indicates a rather expensive current valuation of PEP.
- PEP's Price/Earnings ratio is in line with the industry average.
- PEP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.25.
- PEP is valuated correctly with a Price/Forward Earnings ratio of 16.90.
- PEP's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of PEP to the average of the S&P500 Index (25.98), we can say PEP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.58 | ||
| Fwd PE | 16.9 |
4.2 Price Multiples
- PEP's Enterprise Value to EBITDA ratio is in line with the industry average.
- PEP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.38 | ||
| EV/EBITDA | 13.65 |
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)43.78
PEG (5Y)2.29
EPS Next 2Y2.84%
EPS Next 3Y3.8%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.94%, 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 1.66. PEP pays more dividend than 93.75% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, PEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.94% |
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
- 104.55% 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.
DP104.55%
EPS Next 2Y2.84%
EPS Next 3Y3.8%
PEPSICO INC / PEP FAQ
Can you provide the ChartMill fundamental rating for PEPSICO INC?
ChartMill assigns a fundamental rating of 4 / 10 to PEP.
Can you provide the valuation status for PEPSICO INC?
ChartMill assigns a valuation rating of 3 / 10 to PEPSICO INC (PEP). This can be considered as Overvalued.
Can you provide the profitability details for PEPSICO INC?
PEPSICO INC (PEP) has a profitability rating of 7 / 10.
What are the PE and PB ratios of PEPSICO INC (PEP) stock?
The Price/Earnings (PE) ratio for PEPSICO INC (PEP) is 18.58 and the Price/Book (PB) ratio is 10.29.
How sustainable is the dividend of PEPSICO INC (PEP) stock?
The dividend rating of PEPSICO INC (PEP) is 6 / 10 and the dividend payout ratio is 104.55%.