PepsiCo-Stock return on Snacks

Pepsi has a strong dividend stock and it recommends Pepsi investors will earn good return.

PepsiCo Inc and the Coca-Cola are the backbone of beverages both of them payback same amount of dividends on similar investments and both are the member of S&P 500 Index. PepsiCo revenues (CAGR) is 8.7% over the last three decades alike of Coca-Cola (CAGR) of 8.6%. PepsiCo snack products has excelled well in the market in respect of its beverage business. Latin America Foods revenue generation stated 9% upbringing in Sales in the duration of nine months. Likewise PepsiCo North America revenue was more than 4% for the same duration. PepsiCo earnings are forecasted to increase 8% in 2014.Coca-Cola projection of earnings is 6% for the same year. Here is the reason why PepsiCo is performing well in the market and why we feel bullish about PepsiCo.

Dividend Return

PepsiCo Return of stock dividends for a year is 2.73% down from the previous 3%.While CocaCola dividend return is 2.82%.

Dividend Upbringing

PepsiCo is continuously delivering increased dividend payouts in the 25 back to back years and increased annual returns at the rate of 9.8% in previous seven years.

Competitors Analysis

PepsiCo increased dividend returns make the company going ahead showing strong upbringing in bottom line as compared to Coca-Cola and Dr Pepper Snapple their P/E multiple  is higher than of PepsiCo.

PepsiCo P/E is 17.5x, Coca-Cola is 17.7x and Dr Pepper Snapple is 14.7x.PepsiCo EPS Growth is forecasted to be 8% while the Coca-Cola and Dr Pepper Snapple have 6%. Dr Pepper Snapple current dividend return is high 3.13%, Coca-Cola is 2.85% and PepsiCo is 2.73%.

Debt Ratio

PepsiCo debt ratio has increased over the past five years as it has started snack businesses and unify its bottling activities.

PepsiCo debt ratio is $29 billion  which is low from other competitors.

Cash Flow

Current Cash Flow of PepsiCo $6.4 billion which is 12% higher than the previous year. PepsiCo Capital expenditure amounted to $3 billion almost for 4 years.

Repurchasing of Shares

PepsiCo is planning to repurchase worth $10 billion which is anticipated to be accomplished in three years.  PepsiCo announced that it will return $6 billion to its share holders . $3 billion are to be returned as dividends and the outstanding by share repurchases.

PepsiCo has returned over $65 billion to its investors in the means of dividends and share repurchases by 2012.

Dividend Refund Ratio

Stock Dividends refund ratio for last five year was almost 50% as an average, PepsiCo earnings were improved and increase dividends led to upbringing of the bottomline this happened due to incorporating the non-beverage segments.

Conclusion

PepsiCo has become the most prominent investment stock for the investors as increasing growth in the earnings and revenues gets the attention of investors in it while Coca-Cola is also a platform where investors can refund their investment and earn higher returns. Dr Pepper Snapple  is also an good avenue for investment in stocks to yield high return on your investment.