Financial Survey: PepsiCo (PEP) vs. Its Peers

PepsiCo (NASDAQ:PEP) is one of 137 public companies in the “Beverages” industry, but how does it contrast to its rivals? We will compare PepsiCo to similar businesses based on the strength of its risk, institutional ownership, valuation, analyst recommendations, earnings, profitability and dividends.

Dividends

PepsiCo pays an annual dividend of $5.92 per share and has a dividend yield of 4.2%. PepsiCo pays out 74.4% of its earnings in the form of a dividend. As a group, “Beverages” companies pay a dividend yield of 2.9% and pay out 48.9% of their earnings in the form of a dividend. PepsiCo has increased its dividend for 54 consecutive years.

Volatility and Risk

PepsiCo has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, PepsiCo’s rivals have a beta of -0.23, suggesting that their average stock price is 123% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for PepsiCo and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PepsiCo	1	14	4	1	2.25
PepsiCo Competitors	1282	4329	5775	230	2.43

PepsiCo presently has a consensus price target of $143.28, indicating a potential upside of 0.60%. As a group, “Beverages” companies have a potential upside of 6.12%. Given PepsiCo’s rivals stronger consensus rating and higher possible upside, analysts plainly believe PepsiCo has less favorable growth aspects than its rivals.

Institutional and Insider Ownership

73.1% of PepsiCo shares are held by institutional investors. Comparatively, 36.3% of shares of all “Beverages” companies are held by institutional investors. 0.1% of PepsiCo shares are held by company insiders. Comparatively, 19.4% of shares of all “Beverages” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares PepsiCo and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PepsiCo	11.09%	53.08%	10.42%
PepsiCo Competitors	-8.58%	-34.35%	0.18%

Earnings and Valuation

This table compares PepsiCo and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
PepsiCo	$98.24 billion	$8.24 billion	17.89
PepsiCo Competitors	$52.18 billion	$869.16 million	9.32

PepsiCo has higher revenue and earnings than its rivals. PepsiCo is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

PepsiCo beats its rivals on 10 of the 15 factors compared.

About PepsiCo

PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips; cereals, rice, pasta, mixes and syrups, granola bars, grits, oatmeal, rice cakes, and side dishes; beverage concentrates, fountain syrups, and finished goods; ready-to-drink tea, coffee, and juices; dairy products; and sparkling water makers and related products, as well as distributes alcoholic beverages under Hard MTN Dew brand. The company offers its products primarily under the Lay’s, Doritos, Fritos, Tostitos, BaiCaoWei, Cheetos, Cap’n Crunch, Life, Pearl Milling Company, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, Rice-A-Roni, Aquafina, Bubly, Emperador, Diet Mountain Dew, Diet Pepsi, Gatorade Zero, Crush, Propel, Dr Pepper, Schweppes, Marias Gamesa, Ruffles, Sabritas, Saladitas, Tostitos, 7UP, Diet 7UP, H2oh!, Manzanita Sol, Mirinda, Pepsi Black, Pepsi Max, San Carlos, Toddy, Walkers, Chipsy, Kurkure, Sasko, Spekko, White Star, Smith’s, Sting, SodaStream, Lubimyj Sad, Agusha, Chudo, Domik v Derevne, Lipton, and other brands. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. The company was founded in 1898 and is based in Purchase, New York.