PEPSICO INC (PEP)
US7134481081 - Common Stock
PEP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. While PEP belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. PEP is quite expensive at the moment. It does show a decent growth rate. 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.
PEP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PEP has a better Return On Assets (9.03%) than 68.75% of its industry peers.
The Return On Equity of PEP (49.04%) is better than 100.00% of its industry peers.
PEP has a better Return On Invested Capital (16.43%) than 84.38% of its industry peers.
PEP had an Average Return On Invested Capital over the past 3 years of 15.19%. This is above the industry average of 12.35%.
The 3 year average ROIC (15.19%) for PEP is below the current ROIC(16.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.03% | ||
| ROE | 49.04% | ||
| ROIC | 16.43% |
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
PEP has a Profit Margin (9.92%) which is in line with its industry peers.
PEP's Profit Margin has declined in the last couple of years.
PEP has a Operating Margin of 15.00%. This is comparable to the rest of the industry: PEP outperforms 59.38% of its industry peers.
PEP's Operating Margin has been stable in the last couple of years.
PEP has a better Gross Margin (54.37%) than 71.88% 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% | ||
| PM (TTM) | 9.92% | ||
| GM | 54.37% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PEP is creating value.
PEP has less shares outstanding than it did 1 year ago.
PEP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for PEP is higher compared to a year ago.
2.2 Solvency
PEP has an Altman-Z score of 4.06. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
PEP has a better Altman-Z score (4.06) than 71.88% of its industry peers.
The Debt to FCF ratio of PEP is 5.57, which is a neutral value as it means it would take PEP, 5.57 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 5.57, PEP is doing good in the industry, outperforming 62.50% of the companies in the same industry.
A Debt/Equity ratio of 2.03 is on the high side and indicates that PEP has dependencies on debt financing.
PEP has a worse Debt to Equity ratio (2.03) than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 5.57 | ||
| Altman-Z | 4.06 |
ROIC/WACC1.97
WACC8.34%
2.3 Liquidity
PEP has a Current Ratio of 0.85. 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 Current ratio of 0.85. This is in the lower half of the industry: PEP underperforms 75.00% of its industry peers.
A Quick Ratio of 0.68 indicates that PEP may have some problems paying its short term obligations.
PEP has a Quick ratio (0.68) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
PEP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.22%, which is quite good.
Measured over the past 5 years, PEP shows a small growth in Earnings Per Share. The EPS has been growing by 6.16% on average per year.
Looking at the last year, PEP shows a small growth in Revenue. The Revenue has grown by 5.88% in the last year.
PEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.18% yearly.
EPS 1Y (TTM)12.22%
EPS 3Y11.35%
EPS 5Y6.16%
EPS growth Q2Q6.59%
Revenue 1Y (TTM)5.88%
Revenue growth 3Y9.13%
Revenue growth 5Y7.18%
Revenue growth Q2Q-0.52%
3.2 Future
PEP is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.74% yearly.
The Revenue is expected to grow by 5.18% on average over the next years.
EPS Next Y8.06%
EPS Next 2Y8.1%
EPS Next 3Y7.75%
EPS Next 5Y7.74%
Revenue Next Year2.94%
Revenue Next 2Y3.83%
Revenue Next 3Y4.09%
Revenue Next 5Y5.18%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 23.19, PEP is valued on the expensive side.
Based on the Price/Earnings ratio, PEP is valued a bit cheaper than 62.50% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.20. PEP is around the same levels.
Based on the Price/Forward Earnings ratio of 21.46, the valuation of PEP can be described as rather expensive.
PEP's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.63, PEP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.19 | ||
| Fwd PE | 21.46 |
4.2 Price Multiples
PEP's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, PEP is valued a bit cheaper than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.65 | ||
| EV/EBITDA | 16.66 |
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.
The decent profitability rating of PEP may justify a higher PE ratio.
PEG (NY)2.88
PEG (5Y)3.76
EPS Next 2Y8.1%
EPS Next 3Y7.75%
5. Dividend
5.1 Amount
PEP has a Yearly Dividend Yield of 2.96%. 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 2.50. PEP pays more dividend than 84.38% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, PEP pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.87%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
PEP pays out 73.64% of its income as dividend. This is not a sustainable payout ratio.
PEP's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP73.64%
EPS Next 2Y8.1%
EPS Next 3Y7.75%
PEPSICO INC
NASDAQ:PEP (4/25/2024, 5:52:45 PM)
After market: 175.23 -1.45 (-0.82%)176.68
-0.73 (-0.41%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap242.85B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.96% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.19 | ||
| Fwd PE | 21.46 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.88
PEG (5Y)3.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.03% | ||
| ROE | 49.04% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15% | ||
| PM (TTM) | 9.92% | ||
| GM | 54.37% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.85 | ||
| Quick Ratio | 0.68 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)12.22%
EPS 3Y11.35%
EPS 5Y
EPS growth Q2Q
EPS Next Y8.06%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)5.88%
Revenue growth 3Y9.13%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y