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Roman Cruz
Roman Cruz

Buy Pepsi Stock

PepsiCo (NASDAQ: PEP) shares have been able to avoid the gravitational pull of the market pullback for the most part and are only 3% off their August high. Undoubtedly, the defensive dividend stock is a prime target for investors looking to dampen market volatility. Though Pepsi stock and other consumer staples may still feel some of the shockwaves, it's likely that they'll continue to do a better job of holding their own than the market averages. Despite its relatively rich valuation multiple, I remain bullish on PEP stock since few firms can offer a comparable degree of certainty these days.

buy pepsi stock

Still, after a 23% plunge in the S&P 500 (SPX), there are many better deals than Pepsi. At writing, Pepsi stock trades at a hefty 26.3x trailing earnings multiple. The 2.63% dividend yield may seem attractive, but with certain battered telecom stocks offering more than 7% yields, Pepsi is fairly valued at best and a likely candidate to fizzle out once the rest of the market finds its footing. Nonetheless, it's a prime candidate for current market conditions.

Though you can find cheaper stocks elsewhere, few stocks can offer the same magnitude of stability as Pepsi. With a portfolio of some of the best-known consumer-packaged goods that tend to experience stable demand in dire economic conditions, Pepsi is one of few firms that can offer anxious investors true peace of mind in the face of the unknown. For the type of exposure Pepsi will grant, the price of admission seems worth paying for those looking to batten down the hatches.

Seemingly cheap stocks (think discretionary firms whose shares boast single-digit P/E multiples) can suddenly become more expensive if earnings sink faster than expected. That's why chasing low P/E multiples may not be the best strategy to stabilize your portfolio in the face of a market down cycle.

Raytheon (NYSE: RTX) and PepsiCo (NASDAQ: PEP) have long attracted dividend stock investors. These two have excellent businesses that support their dividend payments. This video will highlight which dividend stock is better for passive income investors.

10 stocks we like better than PepsiCoWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

I'm a U.S. based financial writer with an MBA in Finance. I have over 14 years of investment experience, and generally focus on stocks that are more defensive in nature, with a medium to long-term horizon. My goal is to share useful and insightful knowledge and analysis with readers. Contributing author for Hoya Capital Income Builder.

PepsiCo (NASDAQ:PEP) is one of those stocks where investors have grown accustomed to its predictability. The company's impressive lineup of household brands lends itself to consistent pricing power and margin expansion. While the company is not growing nearly as fast as hyper-growth tech stocks, its consistency, and perhaps more importantly the perception of consistency, has helped the stock avoid the intense volatility seen in the tech sectors. The stock is yielding 2.7%, placing it at the low end of the past decade. The stock may only be suitable for those fearful of further market weakness and even then, the rich valuation might not offer guaranteed protection.

While PEP's shares have gained marginally since the earnings release, they have lost 2.1% year-to-date to close the last trading session at $170.06. However, the stock surged 8.3% over the past month.

In terms of forward non-GAAP P/E, PEP's 25.50x is 42.8% higher than the 17.85x industry average. Likewise, its 3.52x forward non-GAAP PEG is 36.8% higher than the 2.57x industry average. And the stock's 11.95x forward P/B is 306.8% higher than the 2.94x industry average.

Our proprietary rating system also evaluates each stock based on eight distinct categories. PEP has a B grade for Quality, consistent with its 7.21% levered FCF margin, which is 112% higher than the industry average of 3.40%.

Despite facing rising commodity and freight costs, PEP reported impressive revenue and earnings in its last reported quarter. The company also increased its organic revenue and core EPS outlook for fiscal 2022. The stock is trading above its 50-day and 200-day moving average of $166.88 and $166.71, respectively, indicating an uptrend.

PEP has an overall POWR Rating of B, equating to a Buy rating. You might want to consider investing in the following Beverages stocks with an A (Strong Buy) or B (Buy) rating: Primo Water Corporation (PRMW), Kirin Holdings Company, Limited (KNBWY), and Carlsberg A/S (CABGY).

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.

Although it bounced back well from a Q1 2020 selloff, stiff competition from its rivals has left PepsiCo fighting for a consumer base, and prospective buyers are enquiring: is PepsiCo stock overvalued?

The current consensus among 24 polled investment analysts is to Hold stock in PepsiCo Inc. This rating has held steady since March, when it was unchanged from a Hold rating.Move your mouse over pastmonths for detail

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PepsiCo (NASDAQ: PEP) is an international food, snack, and beverage company with headquarters in New York. It is one of the most recognizable brands in the world. The stock has held steady in 2022 so far, not a mean feat considering the bloodbath in the markets.

Despite the rising inflation levels, economic slowdowns, and the continuously rising interest rates by the Fed, the company has lost only around 1.8% year-to-date, while most growth stocks are well under the pump.

As major indices are performing poorly, investors are drawn toward stocks that can boost their income levels by paying out constant dividends. The best thing about PepsiCo is not only its paid dividends consistently but has also increased its annual dividends for around 50 consecutive years.

The stock closed at $170.1, and the average consensus target for the stock is $184.77, a potential upside of 8.62%. PepsiCo is no doubt one of the top-performing stocks in the current market and thus can be a buy.

7. If the stock market that Pepsi is registered on is closed at the time of buying, your order will be scheduled for when the stock market reopens. Read about what time each stock market opens and closes.

Stock buybacks are when companies buy back their own stock, removing it from the marketplace. Stock buybacks increase the value of the remaining shares because there is now less common stock outstanding and company earnings are split among fewer shares.

PepsiCo Inc., ending a closelywatched takeover saga during which rival Coca-Cola Co. nearly walked awaywith the prize, sealed a deal to acquire QuakerOats Co. for $13.4 billion in stock and set in motion a series ofmanagement changes related to the deal.

Over the past year, many PepsiCo, Inc. (NASDAQ:PEP) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

It doesn't really mean much that no insider has traded PepsiCo shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of PepsiCo insider transactions don't fill us with confidence. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 2 warning signs for PepsiCo you should know about.

The massive cash holdings of U.S. companies is beginning to spill into the stock market. According to the Washington Post, American companies have already announced that they will buy back $273 of stock this year.

For example, Pepsico (PEP) announced in March that it would increase its dividend and buy back $10 billion of stock. Meanwhile, it carries about $20 billion in debt, which means that the company chose to buy back shares rather than pay down debt.

You can't blame them either. It's the smart thing to do given that in the current market environment Pepsi only needs to pay about 3.9% to borrow money for ten years from bond-hungry investors, based on the market yield of its 2020 bonds currently. This is historically very low and contrasts with the company's stock price of $68 which is still below its past peak and trading with a price-to-earnings valuation at the lower end of its historical range. 041b061a72


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