PepsiCo Stock: A Dividend Aristocrat to Buy and Hold

Introduction

PepsiCo, Inc. (NASDAQ: PEP) is a global food and beverage company that is headquartered in Purchase, New York. The company was founded in 1893 as the Brad's Drink Company and was renamed Pepsi-Cola Company in 1902. PepsiCo acquired Frito-Lay in 1965 and merged with Quaker Oats in 2001. Today, PepsiCo is one of the largest food and beverage companies in the world, with a portfolio of brands that includes Pepsi, Mountain Dew, Gatorade, Quaker Oats, and Frito-Lay.

Business Overview

PepsiCo's business is divided into six segments:

• North America Beverages: This segment includes the company's beverage business in the United States and Canada.
• Latin America Beverages: This segment includes the company's beverage business in Latin America.
• Europe Sub-Saharan Africa (ESSA) Beverages: This segment includes the company's beverage business in Europe and Sub-Saharan Africa.
• Asia Pacific, Middle East & North Africa (APMENA) Beverages: This segment includes the company's beverage business in Asia Pacific, the Middle East, and North Africa.
• Frito-Lay North America: This segment includes the company's snack food business in the United States and Canada.
• Quaker Foods North America: This segment includes the company's food business in the United States and Canada.

Financial Performance

PepsiCo has a long history of financial success. The company has increased its revenue and earnings per share (EPS) for 11 consecutive years. In 2022, PepsiCo reported revenue of $76.4 billion and EPS of $6.29. The company's free cash flow was $10.5 billion.

Dividend History

PepsiCo is a Dividend Aristocrat, which means that the company has increased its dividend for at least 25 consecutive years. PepsiCo has increased its dividend for 50 consecutive years. The company's current dividend yield is 2.7%.

Valuation

PepsiCo's stock is trading at a forward price-to-earnings (P/E) ratio of 24. This is in line with the P/E ratios of other large-cap food and beverage companies. PepsiCo's stock is also trading at a slight premium to the S&P 500 index.

Risks

There are a number of risks that could impact PepsiCo's business, including:

• Competition: PepsiCo faces competition from a number of large food and beverage companies, including Coca-Cola, Nestle, and Unilever.
• Commodity costs: PepsiCo's costs are affected by the prices of commodities, such as corn, sugar, and wheat.
• Foreign currency fluctuations: PepsiCo operates in a number of countries, and its financial results can be impacted by fluctuations in foreign currency exchange rates.

Outlook

PepsiCo is a well-established company with a strong track record of financial success. The company's dividend history and its exposure to the growing global food and beverage market make it an attractive investment for income investors.

Table 1: PepsiCo's Financial Performance

Table 2: PepsiCo's Dividend History

Table 3: PepsiCo's Valuation

Table 4: Risks to PepsiCo's Business