NYSE:PEP
$60.26
(2/9 2:56PM)
+2.2%
| Open | $59.29 |
Mkt Cap | $92.0 Billion |
| High | $60.48 |
52Wk High | $64.48 |
| Low | $59 |
52Wk Low | $45.39 |
| Volume | 5.5 Million |
Avg Vol 10D | 6.8 Million |
Ockham's Rating/Recommendation Summary
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PEP Revenue
As a value investing shop, we are interested in seeing how PEP's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 3.16x and the low end of the range at 2.37x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for PEP of 2.18x is well below its normal historic Price to Sales levels. At a price of $59.51, PEP is 22% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
PEP Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. PEP is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for PEP, the current level of Cash Earnings compared to its historical levels helps identify where PEP is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 18.62 and a historical low Cash Earnings per share ratio of 13.85, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for PEP? From the Ockham perspective, we are looking specifically at PEP to see if the market is recognizing the huge disparity between PEP's past stock price to Cash Earnings ratio to today's levels. At a difference of 17% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at PEP. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
PEP Dividends
A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.
Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from PEP against the historic high and low levels over an available data range. Because PEP has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In PEP’s case, the estimated annual dividend is $1.80 producing a current dividend yield of 3.02%. The highest dividend yield from PEP in recent history was 3.97% while the lowest dividend yield was 1.10%. PEP’s current dividend yield is therefore significantly higher than its median dividend yield historically. In fact, the current yield is 19.13% above the median which weighs very positively on our analysis of PEP.
The Outlook for Emerging Markets and PepsiCo, Incorporated Discussed on Fox Business
There is no doubt that the emerging markets are where the growth is right now. The latest news mention of PEP on Fox Business was in relation to emerging markets.
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Learn About RazorWire?See Why PepsiCo, Incorporated News Was Discussed on Squawk Box
The latest news from Squawk Box on PEP is available through Ockham's news analytics platform RazorWire.
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Learn About RazorWire?Its All About Earnings: Fast Money Talks About PEP
Earnings or profits are the most key fundamental factor that an investor to be aware of for any stock. We noticed Fast Money discussed earnings on PEP.
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Learn About RazorWire?News Developing on Fast Money for PEP
News has broken via the television and viral blogs regarding PEP, so investors should take an interest in learning what was said.
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Learn About RazorWire?See More News on PEP from Squawk On The Street
The latest news on Squawk On The Street in regards to PEP came through on RazorWire recently.
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Learn About RazorWire?Cost Structure at PepsiCo, Incorporated Discussed on WSJ Marketbeat
The best run companies in the world always have their costs in check. Recently, PEP was mentioned in regards to costs on WSJ Marketbeat.
Based on our methodology, PepsiCo, Incorporated should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; PEP has received less coverage from the financial media in business television and blogs.
“… Coca-Cola, PEPSICO To Post Improved 4Q Results Soft-drink companies Coca-Cola and PEPSICO both are expected to post better fourth-quarter results from a year earlier when they ... …”
PepsiCo, Incorporated News is Being Covered Right Now on Zero Hedge
PepsiCo, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Zero Hedge.
At present, Ockham has a valuation stance of Undervalued on PEP, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, PepsiCo, Incorporated has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.
“… BRANDS INC (YUM)AMETEK INC (AME)PEPSI BOTTLING GROUP INC (PBG)NUCOR CORP (NUE)METLIFE INC (MET)MARATHON OIL CORP (MRO)THERMO FISHER SCIENTIFIC (TMO)PROTECTIVE LIFE CORP (PL)Data ... …”
The Latest News for PEP Was Just on Fast Money
The latest news from Fast Money on PEP is available through Ockham's news analytics platform RazorWire.
The Motley Fool CAPS data suggests that investors believe PepsiCo, Incorporated will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, PEP has been less covered in the news compared to the rest of our universe of stocks. We consider PEP as Undervalued at the current price of $59.64. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.
“… super bowl sunday, so I like the colts and given the points, I like PEPSI, but i'm buying proctor and gamble on any dips. I think p & g looks great at these levels. > > …”
Countdown to the Closing Bell: What is Happening with PepsiCo, Incorporated Now?
The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to PepsiCo, Incorporated.
Based on our methodology, PepsiCo, Incorporated should hold some appeal to value investors as we view it as Undervalued. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of PEP, it is getting significantly more attention in recent news coverage than we are used to seeing.
“… My wife said I read on for dos selling the business to PEPSI. Why didn't you tell me? We have been talking to strategic partners for eight months from private equity firms, it ... …”
Earnings News Regarding PepsiCo, Incorporated Noted on Seeking Alpha Wall St Breakfast
PEP's earnings per share was discussed on Seeking Alpha Wall St Breakfast which means there is something significant going on. Profits are the metric we pay the most attention to in our methodology.
At present, Ockham has a valuation stance of Undervalued on PEP, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. In comparison to the other stocks that we follow, PepsiCo, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.
“… (PR) PEPSI Bottling Group (PBG): Q4 EPS of $0. 59 beats by $0. 16. Revenue of $3. 8B (-0. 1%) vs. $3. 83B. (PR) Suncor Energy (SU): Q4 EPS of C$0. 21 misses by C$0. 18. …”