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PepsiCo, Incorporated (PEP)

PEP Stock Report

2-Year Price History

Recent Price
(7/2 4:16PM) -0.3%
$56.35
52-Week Price
$43.78 – $75.25
Market Capitalization
$87.7 Billion
Dividend Yield
3.20%
Most Recent Dividend
$1.60

Ockham’s Rating

Rating specific information requires Premium Access.
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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 3.06x and the low end of the range at 2.32x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for PEP of 1.94x is well below its normal historic Price to Sales levels. At a price of $56.35, PEP is 28% 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

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company’s value, and currently PEP is significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from PEP. For example, PEP’s Cash Earnings ratio per share has fluctuated between 13.34 and 17.74 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where PEP is with respect to prior business periods.

So with PEP’s current price (latest close of $56.35) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, PEP is 16% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn’t exist in a vacuum. So if the market doesn’t recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with PEP.

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 3.19%. The highest dividend yield from PEP in recent history was 4.11% while the lowest dividend yield was 1.10%. If you are looking for some “bang for your buck” then a dividend yield of 22.46% above the historical median should be enticing. PEP receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.

Peer Comparison

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PepsiCo, Inc. Industry Grouping

(7/2/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding PEP) 11.57 9.25 » 33.51 1.73 1.47 » 4.03 5.79% 28.37%
*10 year range does not include current year values
Coca-Cola Company KO $113.2 Billion $48.88 16.46 13.27 » 56.20 3.30 2.92 » 8.13 8.71% 29.22%
PepsiCo, Inc. PEP $87.7 Billion $56.35 13.10 11.57 » 23.67 1.94 1.79 » 3.67 9.91% 34.16%
Diageo PLC ADS DEO $41.6 Billion $58.96 11.40 7.14 » 29.03 2.06 1.45 » 4.25 7.48% 41.02%
Kraft Foods, Inc. Class A KFT $38.2 Billion $25.96 9.80 9.35 » 18.52 0.90 0.86 » 2.56 6.36% 10.22%
Unilever N.V. UN $37.0 Billion $24.04 7.96 7.02 » 28.90 1.06 1.05 » 1.86 1.05% 40.78%
General Mills, Inc. GIS $19.2 Billion $58.50 12.21 9.46 » 34.91 1.32 1.09 » 3.34 5.38% 20.62%
>
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The latest TV Media Discussion

4:31:18 PM PEP $56.58 PepsiCo, Inc.
1 days ago (07/02)
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4:30:27 PM PEP $56.58 PepsiCo, Inc.
1 days ago (07/02)
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4:22:24 PM PEP $56.35 PepsiCo, Inc.
1 days ago (07/02)
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4:21:54 PM PEP $56.35 PepsiCo, Inc.
1 days ago (07/02)
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4:18:44 PM PEP $56.35 PepsiCo, Inc.
1 days ago (07/02)
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4:12:27 PM PEP $56.49 PepsiCo, Inc.
1 days ago (07/02)
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3:37:38 PM PEP $56.47 PepsiCo, Inc.
1 days ago (07/02)
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3:59:16 PM PEP $56.51 PepsiCo, Inc.
2 days ago (07/01)
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3:42:09 PM PEP $56.61 PepsiCo, Inc.
2 days ago (07/01)
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9:32:07 AM PEP $55.46 PepsiCo, Inc.
5 days ago (06/29)
“…A look at. This as we’re looking up the board and seeing where oil is. 7.58 for a bottle– for oil and there you go. Here is all up arrows, PEPSICO, PEPSI bottling, upgrades there and an eye on berkshire hathaway we’re kicking off a new week and only one up day last week and up one day the prior week. …” …more details…
9:26:42 AM PEP $55.43 PepsiCo, Inc.
5 days ago (06/29)
“…Push from the bottom. Light volume brought with it volatility and take out friday of course with the russell reweighting, but certainly I have a lot of news in all different cases, wendy’s from PEPSI, to morgan stanley, we have an energy deal, some drug so certainly a lot of bits and piece ins different sectors that could be market moving. Back to you. Connell, what are you watching. Connell: we’re down, as nicole …” …more details…
11:38:49 AM PEP $53.99 PepsiCo, Inc.
8 days ago (06/26)
“…Sector? >> that one just stands out. There may be a couple others, but we’re not big tech investors. >> what else have you got play? You mentioned coke, you mentioned PEPSI. What else? >> I mentioned viacom, news corp beat. >> viacom and news corp, those have to be recovery stocks, right? Media has been in the dumpster, …” …more details…
7:17:19 PM PEP $53.99 PepsiCo, Inc.
America's Nightly Scoreboard
8 days ago (06/25)
“…Tristies out shown his fame and stories abounded of numerous facial surgeries an fascination with exotic animals and attempt to buy the remains of the grotesquely deformed elephant man, and 1984, his fair caught fire while filming a PEPSI commercial. And that was nothing compared to the turmoil yet to come. >> i’m hoping for a speedy end to the horrifying, horrifying experience to which I have been …” …more details…
6:16:02 PM PEP $53.92 PepsiCo, Inc.
Mad Money
14 days ago (06/19)
“…Just because they’ve got a limited shelf life that doesn’t mean they can’t make you money. Doing. Given that we just talked about PEPSI, consider these stocks as they are awesome. You can’t get enough of them, but they sure don’t keep. We want to look at all the stocks from the internet, video …” …more details…
6:07:15 PM PEP $53.18 PepsiCo, Inc.
Mad Money
16 days ago (06/17)
“…Well, they can go to walmart. They eat at mcdonald’s. Hey, how did those stocks do and they buy general mills. How did that stock do today? How about PEPSI, another one of my charitable trustees. How did that do today? Take a guess. They’re the definition of unlove. There is the definition of uncrowded. These are the stocks that do …” …more details…
3:32:49 PM PEP $52.84 PepsiCo, Inc.
16 days ago (06/17)
“…Consumer staples have been overowned earlier this year. They’ve lagged recently as people put money in basic materials, which appear to be I think you’ve got to own kraft and PEPSI here, some of those names, philip morris international, all 12 times earnings. 4% dividend yields. Boring at heck, but they’re probably going to hold in here in a market that could trade off in the near term due to concerns …” …more details…
3:30:49 PM PEP $52.98 PepsiCo, Inc.
18 days ago (06/15)
“…Regulatory reform issues. And also because of the credit they’ve been moving sideways for a month. Transports aren’t doing anything because they’re stuck with the cyclicals in this pullback that we had. So we’re down to PEPSI and colgate here and the usual crowd of large cap defensive names. But even they’re not moving e they’re not going down at all. …” …more details…
4:02:52 PM PEP $53.49 PepsiCo, Inc.
21 days ago (06/12)
“…In place of that little tiny anybodylets you look at your abbotts, your mercks, which is down on news here mike huckman was talking about earlier. That’s the one exception. But other than that PEPSI and a lot of basic consumer stocks had modest up days here. Also the utilities here and as bertha noted very nice yields on big utilities. Names you’re seeing here all …” …more details…
3:03:05 PM PEP $53.68 PepsiCo, Inc.
21 days ago (06/12)
“…Freeport half-mcmoran all having an amazing run. The defensive names are getting a modest pop to the up side, abbott and PEPSI and merck. Utilities, remember something, they still pay out nice sums of all the big names here, dominion southern, first energy pay 5.25,1p 5.5, in some cases 5.75% yield. …” …more details…
6:53:16 PM PEP $52.97 PepsiCo, Inc.
Mad Money
22 days ago (06/11)
“…No reason why she should not be on the wall of shame. She has been on the board of directors of a company like "new york times" that hit its low and PEPSI americas, only two months off its low of $15. Brenda barnes has proven she is not right for the job. Dan, I think you’re on to …” …more details…
6:03:16 AM PEP $54.15 PepsiCo, Inc.
Squawk Box
25 days ago (06/09)
“…You’ve got on, it wouldn’t hurt >> let’s talk about something >> all right. Just — I hope nobody is smoking around here, because that would go up like — >> like the PEPSI commercial? Very funny. >> let’s talk about my hair. >> let’s talk about your hair. Let’s talk about the sale of chrysler and fearat. …” …more details…
6:54:25 PM PEP $54.15 PepsiCo, Inc.
Mad Money
25 days ago (06/08)
“…The company and I see no reason why she should not be — double negative — on the wall of she hit the low of $3.44, and PEPSI america’s, pas, only two months off its low of $3.15. Brenda barns has proven she is not right for the job. Dan, that’s not a ringing endorsement. …” …more details…
10:59:35 AM PEP $54.72 PepsiCo, Inc.
29 days ago (06/05)
“…>> david novak, runs young brands? >> without a doubt, look at his performance on both share price and developing that franchise.M he was handed a tough fan when PEPSI spun him off. Done a terrific job. >> agreed. >> all right, gentlemen. We are out of time. Thank you very much for your input. Appreciate it. …” …more details…
6:49:15 PM PEP $54.27 PepsiCo, Inc.
Mad Money
6/3/2009 6:49 PM
“…Actionalertsplus.Com name down 2 1/2 bucks today maybe a little it is a natural gas and oil play and refinery play. Went down a couple smackers. PEPSI, we’ve been liking that indra nooyi, if she’d ever like to come on the show we’d love to been buying that stock for actionalertsplus.Com all the way not all the way up. That’s not our style. El dorado gold is the cheapest, …” …more details…
6:48:26 PM PEP $54.27 PepsiCo, Inc.
Mad Money
6/3/2009 6:48 PM
“…>> caller: my stocks are research in motion, rimm. Wso. Conoco phillips, cop. El dorado gold, ego. PEPSICO, pep. Jim, am I diversified? >> let’s see what this gentleman from the washington exit — that’s a really high exit. They have a lot of bear there. …” …more details…
3:04:04 PM PEP $54.18 PepsiCo, Inc.
6/3/2009 3:04 PM
“…Can see the multi-nationals which do well with a weaker we were taking a look at the monthly nationals earlier. Now a different picture. Coca-cola and PEPSI cocan and ibm do well selling overseas and we have a weaker dollar. As the dollar strengthens it puts pressure on the multi-nationals. Airlines are interesting as the transportation index is down 106 points. Take a look at the group of …” …more details…
9:54:33 AM PEP $54.28 PepsiCo, Inc.
6/3/2009 9:54 AM
“…Earnings rose 31% to 69 cents a 30 cents ahead of analyst estimates. Now it’s up 13 1/2%. This is story we’ve been following. PEPSI suggesting it may drop the bid to buy all of PEPSI the two firms far apart on the savings. PEPSI bottling raising the forecast for the second quarter and the full year. Rejected a bid of $29 a share for the two-thirds of stock that PEPSI doesn’t already own. >> thank you very much. >>> to a high-flying stock, mining equipment maker joy this morning they reported a 80% surge in second quarter profits. There are some questions about …” …more details…
9:50:37 AM PEP $54.43 PepsiCo, Inc.
6/3/2009 9:50 AM
“…I didn’t know that. >> tivo. >> jack riley thing today. >>> up next, stocks on the move, including bob evans and PEPSI. >> plus, the commodity rally, equipment makers including joy we mentioned it. Earningses better than expected. Inside the numbers next with the you’re watching "squawk on the …” …more details…
4:12:10 PM PEP $51.80 PepsiCo, Inc.
5/29/2009 4:12 PM
“…>> the real action, lizy, is do you add another broad based retailor like PEPSI in there? Coca-cola is already in there. >> do you like industrials, tobin? >> there are different categories to evolve in. …” …more details…
12:13:19 PM PEP $51.29 PepsiCo, Inc.
5/29/2009 12:13 PM
“…Them trading under $10. They all came under the microscope. So you may see dow jones not just change general motors, but a few of the names. >> I think PEPSI is a front runner and phillip morris could >> i’m curious about your amgen, not one name i’ve heard bantered about that’s interesting. >> I ripped that off from robert …” …more details…
12:11:08 PM PEP $51.32 PepsiCo, Inc.
5/29/2009 12:11 PM
“…Dumped from the dow. The stock is trading less than– >> or you know, of a subway ride here in new york. >> but I like liz’s idea. I think that PEPSICO is a good one, but I like your cisco. I don’t know about conoco flips, we already have exxon and chevron, right? What do you think? >> I think sit go, I think you’re on to something. >> or oracle. …” …more details…
10:39:17 AM PEP $51.27 PepsiCo, Inc.
5/29/2009 10:39 AM
“…Through the house. He said this is going to be a long term, cost us money but we are going to make that turn. The case was summed up by the ceo of PEPSICO who said, look, let’s get on with it, stop the debate. Let’s have a phase in that is not too harsh on business. We can handle that. The ultimate principle of all of …” …more details…
1:16:13 PM PEP $50.86 PepsiCo, Inc.
5/28/2009 1:16 PM
“…Earnings estimates are now 2.80 and still rising. >> chuck, you are going for the brand names. Proctor and gamble and PEPSI. >> they had up in the market of the last two months. Hopefully upgrade in the quality of the portfolio. The defining characteristics of the stocks have been bad balance sheets and good short positions. …” …more details…
8:52:49 AM PEP $51.28 PepsiCo, Inc.
5/27/2009 8:52 AM
“…Charles: what does that mean? >> a pair trade is buying one stock and shorting a similar peer, somebody in the same space, coke versus PEPSI, in this case perhaps mcdonald’s versus starbucks. Mcdonald’s has moved into the coffee space and clearly impact on starbucks. Long mcdonald’s short starbucks. …” …more details…
6:50:05 AM PEP $51.57 PepsiCo, Inc.
Squawk Box
5/26/2009 6:50 AM
“…>> and what we’ve seen now is that business here is trying to rally political support for that a lot of skepticism remaining within the u.S. Business community, but we heard from the PEPSICO ceo that we’ll be fine as long as you give us a plan that’s not too harsh. >>ic the united states is willing to go further than they’ve ever wanted to go in the …” …more details…
5:47:33 PM PEP $51.57 PepsiCo, Inc.
Happy Hour
5/22/2009 5:47 PM
“…When you sell stuff overseas you make in here you take in more dollars because the dollar is weaker. Takes more dollars to pay for that. Very good for companies like mcdonald’s. Good for coke. Good for PEPSI. Good for hewlett-packard. All will do very well until a weaker dollar environment fplt you’re going to invest, look for international companies doing business last but not least I got this e-mail today. …” …more details…
9:22:38 AM PEP $51.74 PepsiCo, Inc.
5/22/2009 9:22 AM
“…In the playoffs 11 straight times since 1985. Game three is tomorrow night at the denver’s PEPSI center. And then who won the other night connell: I love this final hour alexis: it’s really good, connell, usa today. Ashley times of london. …” …more details…
7:48:34 AM PEP $51.49 PepsiCo, Inc.
5/22/2009 7:48 AM
“…Charles: there might be a big soda tax congress is debating it it looks inevitable we’re talking huge taxes 100%, 200% we have a couple soda companies in our fox 50 PEPSI and coca-cola are there major implications if there are tax levees? >> what I read almost trillion dollars in taxes over the years …” …more details…
6:07:36 PM PEP $51.25 PepsiCo, Inc.
Mad Money
5/21/2009 6:07 PM
“…This hurts the steel producers, as we heard in today’s wall street journal, hey, look at coke, not the kind you drink and I like PEPSI. The kind of that you make steel, if I were you, I would sell you a steel in this, if you love steel so much they can use less …” …more details…
4:07:19 PM PEP $51.46 PepsiCo, Inc.
5/21/2009 4:07 PM
“…I wouldn’t chase it down here. The bottom line is we’re lighting up. Even our consumer staples we’ve been very high on, done very well, I blew out all of my PEPSI, all of my unilever is gone. We’ve been raises a lot of cash. I think we’re going to get the import https://www.ockhamresearch.com/files/consumer-goods/food_beverage/processed_packaged-goods/for a little while and i think it’s going to be 2010 before we start rocking and rolling again. …” …more details…
View All PepsiCo, Inc. News

Key Fundamentals

PEP – PepsiCo, Incorporated Fundamentals
Price (7/2 4:16PM) $56.35
Volume (7/2 4:16PM) 8.2 Million
Last Close Price $56.52
10 Day Average Volume 7.3 Million
13 Week Price Range $47.50 – $56.95
52 Week Price Range $43.78 – $75.25
LTM Revenue $43.2 Billion
 
Shares Outstanding (12/2008) 1.6 Billion
Market Capitalization $87.7 Billion
Shares Held By Institutions 1.1 Billion
Institutional Holders 1,752
% Shares Held By Institutions 68.80%
Earnings Per Share (EPS) $3.21
P/E Ratio 17.40
Book Value Per Share $7.73
 
Gross Margin 56.50%
Annual Dividend 1.80
Dividend Yield 3.20%
Beta 0.54
Fiscal Year Ends December

About PepsiCo, Inc.

PepsiCo, Incorporated is considered to operate in the Consumer Goods sector. They specifically operate in the Processed/Packaged Goods business segment contained within the Food & Beverage industry.

A global beverage, snack and food company, which manufactures or uses contract manufacturers, markets and sells a number of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods.

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