PEPSICO INC (PEP) Stock Fundamental Analysis
USA - NASDAQ:PEP - US7134481081 - Common Stock
141.23 USD
+1.2 (+0.86%)
141.54 USD
+0.31 (+0.22%)
We assign a fundamental rating of 5 out of 10 to PEP. 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 on the other hand it scores bad on growth.
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.
Each year in the past 5 years PEP has been profitable.
Each year in the past 5 years PEP had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.17%, PEP is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
PEP has a better Return On Equity (40.99%) than 96.88% of its industry peers.
The Return On Invested Capital of PEP (16.72%) is better than 87.50% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PEP is above the industry average of 10.95%.
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's Profit Margin of 8.23% is fine compared to the rest of the industry. PEP outperforms 62.50% of its industry peers.
PEP's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 15.63%, PEP is doing good in the industry, outperforming 65.63% 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.
PEP has a better Gross Margin (54.92%) than 65.63% 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 | 15.63% | ||
| 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
PEP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, PEP has about the same amount of shares outstanding.
PEP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, PEP has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.51 indicates that PEP is not in any danger for bankruptcy at the moment.
PEP's Altman-Z score of 3.51 is fine compared to the rest of the industry. PEP outperforms 62.50% 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.
Looking at the Debt to FCF ratio, with a value of 7.27, PEP is in line with its industry, outperforming 56.25% of the companies in the same industry.
A Debt/Equity ratio of 2.14 is on the high side and indicates that PEP has dependencies on debt financing.
The Debt to Equity ratio of PEP (2.14) is worse than 90.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 7.27 | ||
| Altman-Z | 3.51 |
ROIC/WACC2.2
WACC7.6%
2.3 Liquidity
A Current Ratio of 0.78 indicates that PEP may have some problems paying its short term obligations.
PEP has a Current ratio of 0.78. This is in the lower half of the industry: PEP underperforms 78.13% of its industry peers.
A Quick Ratio of 0.60 indicates that PEP may have some problems paying its short term obligations.
PEP's Quick ratio of 0.60 is on the low side compared to the rest of the industry. PEP is outperformed by 71.88% 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%.
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.
PEP shows a decrease in Revenue. In the last year, the revenue decreased by -0.33%.
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)-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 Year1.05%
Revenue Next 2Y2.12%
Revenue Next 3Y2.53%
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.
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
The Price/Earnings ratio is 17.95, which indicates a rather expensive current valuation of PEP.
65.63% of the companies in the same industry are more expensive than PEP, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.20, PEP is valued a bit cheaper.
PEP is valuated correctly with a Price/Forward Earnings ratio of 16.50.
PEP's Price/Forward Earnings is on the same level as the industry average.
PEP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.95 | ||
| Fwd PE | 16.5 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as PEP.
PEP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.37 | ||
| EV/EBITDA | 12.92 |
4.3 Compensation for Growth
The excellent profitability rating of PEP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2.21
EPS Next 2Y2.43%
EPS Next 3Y3.58%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 3.95%. 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 2.84. PEP pays more dividend than 93.75% of the companies in the same industry.
PEP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
5.2 History
On average, the dividend of PEP grows each year by 6.80%, which is quite nice.
PEP has been paying a dividend for at least 10 years, so it has 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
PEP pays out 98.89% 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.
DP98.89%
EPS Next 2Y2.43%
EPS Next 3Y3.58%
141.23
+1.2 (+0.86%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.76%
Inst Owner Change0.55%
Ins Owners0.17%
Ins Owner Change0.06%
Market Cap193.36B
Analysts67.86
Price Target158.64 (12.33%)
Short Float %1.64%
Short Ratio2.59
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
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)0.83%
PT rev (3m)4.44%
EPS NQ rev (1m)-0.06%
EPS NQ rev (3m)-4.17%
EPS NY rev (1m)1.75%
EPS NY rev (3m)1.58%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)1.79%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)1.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.95 | ||
| Fwd PE | 16.5 | ||
| P/S | 2.11 | ||
| P/FCF | 27.37 | ||
| P/OCF | 15.86 | ||
| P/B | 10.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.92 |
EPS(TTM)7.87
EY5.57%
EPS(NY)8.56
Fwd EY6.06%
FCF(TTM)5.16
FCFY3.65%
OCF(TTM)8.9
OCFY6.3%
SpS67.01
BVpS13.45
TBVpS-11.73
PEG (NY)N/A
PEG (5Y)2.21
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 | 3.51 |
F-Score5
WACC7.6%
ROIC/WACC2.2
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 Year1.05%
Revenue Next 2Y2.12%
Revenue Next 3Y2.53%
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%