PEPSICO INC (PEP) Stock Fundamental Analysis
NASDAQ:PEP - Nasdaq - US7134481081 - Common Stock - Currency: USD
PEP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 33 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 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.
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's Return On Assets of 9.21% is fine compared to the rest of the industry. PEP outperforms 72.73% of its industry peers.
With an excellent Return On Equity value of 50.95%, PEP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 16.68%, PEP belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PEP is above the industry average of 11.37%.
The last Return On Invested Capital (16.68%) for PEP is above the 3 year average (15.79%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.21% | ||
| ROE | 50.95% | ||
| ROIC | 16.68% |
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
With a decent Profit Margin value of 10.24%, PEP is doing good in the industry, outperforming 75.76% of the companies in the same industry.
PEP's Profit Margin has been stable in the last couple of years.
The Operating Margin of PEP (15.92%) is better than 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 55.13%, PEP is doing good in the industry, outperforming 72.73% 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 | 15.92% | ||
| PM (TTM) | 10.24% | ||
| GM | 55.13% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PEP is creating some 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
PEP has an Altman-Z score of 3.60. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
PEP's Altman-Z score of 3.60 is fine compared to the rest of the industry. PEP outperforms 63.64% of its industry peers.
PEP has a debt to FCF ratio of 6.68. This is a slightly negative value and a sign of low solvency as PEP would need 6.68 years to pay back of all of its debts.
PEP has a Debt to FCF ratio (6.68) which is in line with its industry peers.
A Debt/Equity ratio of 2.14 is on the high side and indicates that PEP has dependencies on debt financing.
PEP has a Debt to Equity ratio of 2.14. This is amonst the worse of the industry: PEP underperforms 87.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 3.6 |
ROIC/WACC1.73
WACC9.62%
2.3 Liquidity
A Current Ratio of 0.83 indicates that PEP may have some problems paying its short term obligations.
PEP has a Current ratio of 0.83. This is in the lower half of the industry: PEP underperforms 75.76% of its industry peers.
PEP has a Quick Ratio of 0.83. 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 Quick ratio (0.65) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.88% over the past year.
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.
Looking at the last year, PEP shows a decrease in Revenue. The Revenue has decreased by -0.38% in the last year.
PEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.46% yearly.
EPS 1Y (TTM)3.88%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-8.07%
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-1.81%
3.2 Future
PEP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.30% yearly.
Based on estimates for the next years, PEP will show a small growth in Revenue. The Revenue will grow by 3.17% on average per year.
EPS Next Y-2.24%
EPS Next 2Y1.82%
EPS Next 3Y3.59%
EPS Next 5Y4.3%
Revenue Next Year-0.26%
Revenue Next 2Y1.36%
Revenue Next 3Y2.09%
Revenue Next 5Y3.17%
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
PEP is valuated correctly with a Price/Earnings ratio of 16.30.
Based on the Price/Earnings ratio, PEP is valued a bit cheaper than 63.64% of the companies in the same industry.
PEP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.31.
PEP is valuated correctly with a Price/Forward Earnings ratio of 15.47.
Based on the Price/Forward Earnings ratio, PEP is valued a bit cheaper than the industry average as 69.70% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of PEP to the average of the S&P500 Index (22.13), we can say PEP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.3 | ||
| Fwd PE | 15.47 |
4.2 Price Multiples
63.64% of the companies in the same industry are more expensive than PEP, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, PEP is valued a bit cheaper than 60.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.68 | ||
| EV/EBITDA | 11.87 |
4.3 Compensation for Growth
The excellent profitability rating of PEP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)2
EPS Next 2Y1.82%
EPS Next 3Y3.59%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 4.38%, which is a nice return.
Compared to an average industry Dividend Yield of 3.27, PEP pays a better dividend. On top of this PEP pays more dividend than 90.91% of the companies listed in the same industry.
PEP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.38% |
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 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
PEP pays out 78.38% 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.
DP78.38%
EPS Next 2Y1.82%
EPS Next 3Y3.59%
130.85
-1.45 (-1.1%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.94%
Inst Owner Change0.25%
Ins Owners0.17%
Ins Owner Change2.13%
Market Cap179.41B
Analysts67.14
Price Target151.9 (16.09%)
Short Float %1.52%
Short Ratio2.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.38% |
Yearly Dividend5.27
Dividend Growth(5Y)6.8%
DP78.38%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.74%
Min EPS beat(2)-1.39%
Max EPS beat(2)-0.08%
EPS beat(4)1
Avg EPS beat(4)0.77%
Min EPS beat(4)-1.39%
Max EPS beat(4)4.63%
EPS beat(8)5
Avg EPS beat(8)2.43%
EPS beat(12)9
Avg EPS beat(12)3.2%
EPS beat(16)12
Avg EPS beat(16)3.45%
Revenue beat(2)0
Avg Revenue beat(2)-0.76%
Min Revenue beat(2)-1.36%
Max Revenue beat(2)-0.16%
Revenue beat(4)0
Avg Revenue beat(4)-1.4%
Min Revenue beat(4)-2.81%
Max Revenue beat(4)-0.16%
Revenue beat(8)1
Avg Revenue beat(8)-0.95%
Revenue beat(12)5
Avg Revenue beat(12)0.45%
Revenue beat(16)9
Avg Revenue beat(16)1.3%
PT rev (1m)-1.04%
PT rev (3m)-8.99%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-11.91%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.75%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.42%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.3 | ||
| Fwd PE | 15.47 | ||
| P/S | 1.96 | ||
| P/FCF | 24.68 | ||
| P/OCF | 14.27 | ||
| P/B | 9.76 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.87 |
EPS(TTM)8.03
EY6.14%
EPS(NY)8.46
Fwd EY6.47%
FCF(TTM)5.3
FCFY4.05%
OCF(TTM)9.17
OCFY7.01%
SpS66.75
BVpS13.41
TBVpS-11.19
PEG (NY)N/A
PEG (5Y)2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.21% | ||
| ROE | 50.95% | ||
| ROCE | 20.75% | ||
| ROIC | 16.68% | ||
| ROICexc | 19% | ||
| ROICexgc | 41.96% | ||
| OM | 15.92% | ||
| PM (TTM) | 10.24% | ||
| GM | 55.13% | ||
| FCFM | 7.94% |
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-Score6
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 6.68 | ||
| Debt/EBITDA | 2.14 | ||
| Cap/Depr | 136.92% | ||
| Cap/Sales | 5.8% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.16% | ||
| Profit Quality | 77.57% | ||
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.65 | ||
| Altman-Z | 3.6 |
F-Score6
WACC9.62%
ROIC/WACC1.73
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)3.88%
EPS 3Y9.3%
EPS 5Y8.13%
EPS Q2Q%-8.07%
EPS Next Y-2.24%
EPS Next 2Y1.82%
EPS Next 3Y3.59%
EPS Next 5Y4.3%
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-1.81%
Revenue Next Year-0.26%
Revenue Next 2Y1.36%
Revenue Next 3Y2.09%
Revenue Next 5Y3.17%
EBIT growth 1Y4.95%
EBIT growth 3Y8.98%
EBIT growth 5Y6.67%
EBIT Next Year20.6%
EBIT Next 3Y10.35%
EBIT Next 5Y7.72%
FCF growth 1Y36.44%
FCF growth 3Y0.94%
FCF growth 5Y5.82%
OCF growth 1Y18.71%
OCF growth 3Y2.49%
OCF growth 5Y5.33%