PEPSICO INC (PEP) Stock Fundamental Analysis
NASDAQ:PEP - US7134481081 - Common Stock
149.64 USD
+0.66 (+0.44%)
149.9 USD
+0.26 (+0.17%)
Overall PEP gets a fundamental rating of 5 out of 10. We evaluated PEP against 33 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.
1. Profitability
1.1 Basic Checks
PEP had positive earnings in the past year.
PEP had a positive operating cash flow in the past year.
PEP had positive earnings in each of the past 5 years.
Each year in the past 5 years PEP had a positive operating cash flow.
1.2 Ratios
PEP has a better Return On Assets (7.17%) than 66.67% of its industry peers.
PEP's Return On Equity of 40.99% is amongst the best of the industry. PEP outperforms 93.94% of its industry peers.
The Return On Invested Capital of PEP (16.72%) is better than 87.88% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PEP is above the industry average of 11.01%.
The last Return On Invested Capital (16.72%) for PEP is above the 3 year average (15.79%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.17% | ||
| ROE | 40.99% | ||
| ROIC | 16.72% |
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
PEP has a better Profit Margin (8.23%) than 60.61% 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 15.63%. This is in the better half of the industry: PEP outperforms 66.67% of its industry peers.
PEP's Operating Margin has been stable in the last couple of years.
With a decent Gross Margin value of 54.92%, PEP is doing good in the industry, outperforming 66.67% 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 | 15.63% | ||
| PM (TTM) | 8.23% | ||
| GM | 54.92% |
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.
Compared to 1 year ago, PEP has about the same amount of shares outstanding.
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
PEP has an Altman-Z score of 3.59. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of PEP (3.59) is better than 63.64% of its industry peers.
PEP has a debt to FCF ratio of 7.27. This is a slightly negative value and a sign of low solvency as PEP would need 7.27 years to pay back of all of its debts.
PEP has a Debt to FCF ratio (7.27) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.14 is on the high side and indicates that PEP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.14, PEP is doing worse than 90.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 7.27 | ||
| Altman-Z | 3.59 |
ROIC/WACC2.14
WACC7.83%
2.3 Liquidity
A Current Ratio of 0.78 indicates that PEP may have some problems paying its short term obligations.
The Current ratio of PEP (0.78) is worse than 78.79% of its industry peers.
PEP has a Quick Ratio of 0.78. 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 Quick ratio (0.60) than 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
PEP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.63%.
The Earnings Per Share has been growing by 8.13% on average over the past years. This is quite good.
PEP shows a decrease in Revenue. In the last year, the revenue decreased by -0.33%.
PEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.46% yearly.
EPS 1Y (TTM)-0.63%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-7.02%
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%1%
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 3.34% on average per year.
Based on estimates for the next years, PEP will show a small growth in Revenue. The Revenue will grow by 3.19% on average per year.
EPS Next Y-0.7%
EPS Next 2Y2.43%
EPS Next 3Y3.58%
EPS Next 5Y3.34%
Revenue Next Year1.06%
Revenue Next 2Y2.09%
Revenue Next 3Y2.5%
Revenue Next 5Y3.19%
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
Based on the Price/Earnings ratio of 19.01, the valuation of PEP can be described as rather expensive.
PEP's Price/Earnings ratio is a bit cheaper when compared to the industry. PEP is cheaper than 63.64% of the companies in the same industry.
PEP is valuated rather cheaply when we compare the Price/Earnings ratio to 27.24, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.48, 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 60.61% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.82, PEP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.01 | ||
| Fwd PE | 17.48 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PEP.
Based on the Price/Free Cash Flow ratio, PEP is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29 | ||
| EV/EBITDA | 13.54 |
4.3 Compensation for Growth
PEP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.34
EPS Next 2Y2.43%
EPS Next 3Y3.58%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 3.82%. Purely for dividend investing, there may be better candidates out there.
PEP's Dividend Yield is rather good when compared to the industry average which is at 2.79. PEP pays more dividend than 96.97% of the companies in the same industry.
PEP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.82% |
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 Years34
Div Non Decr Years34
5.3 Sustainability
98.89% 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.
DP98.89%
EPS Next 2Y2.43%
EPS Next 3Y3.58%
149.64
+0.66 (+0.44%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.76%
Inst Owner Change0.54%
Ins Owners0.17%
Ins Owner Change2.12%
Market Cap204.87B
Analysts67.86
Price Target157.33 (5.14%)
Short Float %1.62%
Short Ratio2.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.82% |
Yearly Dividend5.27
Dividend Growth(5Y)6.8%
DP98.89%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.01%
Min EPS beat(2)-1.39%
Max EPS beat(2)3.41%
EPS beat(4)1
Avg EPS beat(4)0.46%
Min EPS beat(4)-1.39%
Max EPS beat(4)3.41%
EPS beat(8)5
Avg EPS beat(8)2.18%
EPS beat(12)9
Avg EPS beat(12)2.98%
EPS beat(16)12
Avg EPS beat(16)2.97%
Revenue beat(2)1
Avg Revenue beat(2)0.42%
Min Revenue beat(2)-0.16%
Max Revenue beat(2)1%
Revenue beat(4)1
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)1%
Revenue beat(8)1
Avg Revenue beat(8)-1.03%
Revenue beat(12)5
Avg Revenue beat(12)0.31%
Revenue beat(16)9
Avg Revenue beat(16)0.99%
PT rev (1m)4.51%
PT rev (3m)2.5%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-6.81%
EPS NY rev (1m)1.75%
EPS NY rev (3m)1.58%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)1.89%
Revenue NY rev (1m)1.18%
Revenue NY rev (3m)1.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.01 | ||
| Fwd PE | 17.48 | ||
| P/S | 2.23 | ||
| P/FCF | 29 | ||
| P/OCF | 16.81 | ||
| P/B | 11.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.54 |
EPS(TTM)7.87
EY5.26%
EPS(NY)8.56
Fwd EY5.72%
FCF(TTM)5.16
FCFY3.45%
OCF(TTM)8.9
OCFY5.95%
SpS67.01
BVpS13.45
TBVpS-11.73
PEG (NY)N/A
PEG (5Y)2.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.17% | ||
| ROE | 40.99% | ||
| ROCE | 20.8% | ||
| ROIC | 16.72% | ||
| ROICexc | 18.91% | ||
| ROICexgc | 43.5% | ||
| OM | 15.63% | ||
| PM (TTM) | 8.23% | ||
| GM | 54.92% | ||
| FCFM | 7.7% |
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-Score5
Asset Turnover0.87
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 7.27 | ||
| Debt/EBITDA | 2.15 | ||
| Cap/Depr | 129.26% | ||
| Cap/Sales | 5.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 66.58% | ||
| Profit Quality | 93.56% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 3.59 |
F-Score5
WACC7.83%
ROIC/WACC2.14
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)-0.63%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-7.02%
EPS Next Y-0.7%
EPS Next 2Y2.43%
EPS Next 3Y3.58%
EPS Next 5Y3.34%
Revenue 1Y (TTM)-0.33%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%1%
Revenue Next Year1.06%
Revenue Next 2Y2.09%
Revenue Next 3Y2.5%
Revenue Next 5Y3.19%
EBIT growth 1Y0.64%
EBIT growth 3Y8.98%
EBIT growth 5Y6.67%
EBIT Next Year22.12%
EBIT Next 3Y10.64%
EBIT Next 5Y7.49%
FCF growth 1Y23.32%
FCF growth 3Y0.94%
FCF growth 5Y5.82%
OCF growth 1Y11.32%
OCF growth 3Y2.49%
OCF growth 5Y5.33%