Head-To-Head Analysis: PepsiCo (PEP) and 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 related businesses based on the strength of its profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Risk and Volatility

PepsiCo has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, PepsiCo’s rivals have a beta of -0.22, meaning that their average stock price is 122% less volatile than the S&P 500.

Institutional & 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 insiders. Comparatively, 19.4% of shares of all “Beverages” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

PepsiCo pays an annual dividend of $5.92 per share and has a dividend yield of 4.1%. 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 48.1% of their earnings in the form of a dividend. PepsiCo has raised its dividend for 54 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for PepsiCo and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PepsiCo	1	14	4	1	2.25
PepsiCo Competitors	1290	4341	5790	232	2.43

PepsiCo presently has a consensus target price of $143.28, suggesting a potential downside of 0.63%. As a group, “Beverages” companies have a potential upside of 8.46%. Given PepsiCo’s rivals stronger consensus rating and higher probable upside, analysts plainly believe PepsiCo has less favorable growth aspects than its rivals.

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	-7.97%	-14.06%	0.46%

Valuation and Earnings

This table compares PepsiCo and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
PepsiCo	$93.92 billion	$8.24 billion	18.11
PepsiCo Competitors	$130.21 billion	$869.16 million	6.05

PepsiCo’s rivals have higher revenue, but lower earnings than PepsiCo. 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 9 of the 15 factors compared.

PepsiCo Company Profile

PepsiCo, Inc. is a global food and beverage company that develops, manufactures, markets and distributes a broad range of products. Its portfolio includes snacks such as Lay’s, Doritos and Cheetos, as well as beverages including Pepsi, Gatorade and Mountain Dew. The company was formed in 1965 through the merger of Pepsi-Cola and Frito-Lay. Its products are sold in more than 200 countries and territories through retail, food-service and other distribution channels. PepsiCo is headquartered in Purchase, New York.