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 32 industry peers in the Beverages industry. While PEP has a great profitability rating, there are quite some concerns on its financial health. PEP is valued correctly, but it does not seem to be growing. PEP also has an excellent dividend rating.
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.
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
Looking at the Return On Assets, with a value of 9.21%, PEP is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
The Return On Equity of PEP (50.95%) is better than 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 16.68%, PEP belongs to the top of the industry, outperforming 87.50% 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 11.91%.
The 3 year average ROIC (15.79%) for PEP is below the current ROIC(16.68%), indicating increased profibility in the last year.
| 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 75.00% of the companies in the same industry.
In the last couple of years the Profit Margin of PEP has remained more or less at the same level.
PEP has a better Operating Margin (15.92%) than 65.63% of its industry peers.
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 55.13%, PEP is doing good in the industry, outperforming 71.88% 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) well above the Cost of Capital (WACC), PEP is creating value.
PEP has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for PEP has been reduced compared to 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 3.59. This indicates that PEP is financially healthy and has little risk of bankruptcy at the moment.
PEP has a Altman-Z score of 3.59. This is comparable to the rest of the industry: PEP outperforms 59.38% 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 of 6.68. This is comparable to the rest of the industry: PEP outperforms 56.25% of its industry peers.
PEP has a Debt/Equity ratio of 2.14. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of PEP (2.14) is worse than 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.14 | ||
| Debt/FCF | 6.68 | ||
| Altman-Z | 3.59 |
ROIC/WACC2.12
WACC7.88%
2.3 Liquidity
PEP has a Current 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.
Looking at the Current ratio, with a value of 0.83, PEP is doing worse than 75.00% of the companies in the same industry.
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 worse Quick ratio (0.65) than 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.83 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
PEP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.88%.
PEP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.13% yearly.
The Revenue has decreased by -0.38% in the past year.
The Revenue has been growing slightly by 6.46% on average over the past years.
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 5.18% yearly.
PEP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.00% yearly.
EPS Next Y-2.24%
EPS Next 2Y1.82%
EPS Next 3Y3.59%
EPS Next 5Y5.18%
Revenue Next Year-0.27%
Revenue Next 2Y1.35%
Revenue Next 3Y2.07%
Revenue Next 5Y4%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
With a Price/Earnings ratio of 16.07, PEP is valued correctly.
Based on the Price/Earnings ratio, PEP is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
PEP's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.03.
Based on the Price/Forward Earnings ratio of 15.26, the valuation of PEP can be described as correct.
PEP's Price/Forward Earnings ratio is rather cheap when compared to the industry. PEP is cheaper than 81.25% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.94, PEP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.07 | ||
| Fwd PE | 15.26 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PEP is valued a bit cheaper than 68.75% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PEP is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.35 | ||
| EV/EBITDA | 11.82 |
4.3 Compensation for Growth
PEP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.98
EPS Next 2Y1.82%
EPS Next 3Y3.59%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.33%, PEP is a good candidate for dividend investing.
PEP's Dividend Yield is rather good when compared to the industry average which is at 2.82. PEP pays more dividend than 93.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, PEP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
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 Years33
Div Non Decr Years33
5.3 Sustainability
78.38% 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.
DP78.38%
EPS Next 2Y1.82%
EPS Next 3Y3.59%
NASDAQ:PEP (5/22/2025, 10:25:07 AM)
129.07
-1.08 (-0.83%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners78.71%
Inst Owner Change0.15%
Ins Owners0.15%
Ins Owner Change2.07%
Market Cap176.97B
Analysts67.14
Price Target153.49 (18.92%)
Short Float %1.6%
Short Ratio2.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
Yearly Dividend5.27
Dividend Growth(5Y)6.8%
DP78.38%
Div Incr Years33
Div Non Decr Years33
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)-7.58%
PT rev (3m)-13.86%
EPS NQ rev (1m)-11.68%
EPS NQ rev (3m)-11.83%
EPS NY rev (1m)-4.49%
EPS NY rev (3m)-4.76%
Revenue NQ rev (1m)-0.45%
Revenue NQ rev (3m)-0.64%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-2.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.07 | ||
| Fwd PE | 15.26 | ||
| P/S | 1.93 | ||
| P/FCF | 24.35 | ||
| P/OCF | 14.07 | ||
| P/B | 9.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.82 |
EPS(TTM)8.03
EY6.22%
EPS(NY)8.46
Fwd EY6.55%
FCF(TTM)5.3
FCFY4.11%
OCF(TTM)9.17
OCFY7.11%
SpS66.75
BVpS13.41
TBVpS-11.19
PEG (NY)N/A
PEG (5Y)1.98
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 | 3.59 |
F-Score6
WACC7.88%
ROIC/WACC2.12
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 5Y5.18%
Revenue 1Y (TTM)-0.38%
Revenue growth 3Y4.94%
Revenue growth 5Y6.46%
Sales Q2Q%-1.81%
Revenue Next Year-0.27%
Revenue Next 2Y1.35%
Revenue Next 3Y2.07%
Revenue Next 5Y4%
EBIT growth 1Y4.95%
EBIT growth 3Y8.98%
EBIT growth 5Y6.67%
EBIT Next Year23.96%
EBIT Next 3Y11.41%
EBIT Next 5Y8.71%
FCF growth 1Y36.44%
FCF growth 3Y0.94%
FCF growth 5Y5.82%
OCF growth 1Y18.71%
OCF growth 3Y2.49%
OCF growth 5Y5.33%