Dividend.com: Pepsi Bottling Pops
09/30/08 - 04:10 PM EDT
Tom Reese and Paul Rubillo
Pepsi Bottling Group Raises Prices, Beats Estimates Pepsi Bottling Group(PBG Quote - Cramer on PBG - Stock Picks) just reported a 2 cents EPS beat, as the company's price increases helped offset volume declines. Sales rose 2.3% to $3.81 billion.
Despite worldwide sales volume that fell 6% -- driven by a 9% decline in Mexico and 6% declines in the United States, Canada and Europe -- the company is raising the lower end of its yearly EPS estimates. The company sees EPS of $2.32-$2.38 -- slightly above its prior forecast of $2.30-$2.38 per share. The stock is trading at 13 times this year's estimates and thus is not too pricey. Despite the low valuation, we prefer shares of Pepsi(PEP Quote - Cramer on PEP - Stock Picks) instead. PBG has a 2.42% dividend yield, based on last night's closing stock price of $28.07. Pepsi Bottling Group is not a recommended dividend stock at this time, holding a Dividend.com Rating of 3.1 out of 5 stars. Wachovia Stock Attracts Bottom-Fishers Wachovia(WB Quote - Cramer on WB - Stock Picks) opened for trading yesterday afternoon at $1.26 and went straight up from there. Last we saw, the stock was actually over $3 in this morning's trading. Investors may be wondering where the value is. The new Wachovia will be made up of Evergreen Investments - the mutual fund arm -- and A.G. Edwards brokerage. It is very difficult to estimate what these two arms are truly worth in this current market environment. The low price Lehman Brothers(LEH Quote - Cramer on LEH - Stock Picks) fetched for its crown jewel investment arm, Neuberger Berman, doesn't make us optimistic about Wachovia's valuation. Investors again need to use caution in going after sub-$5 stocks, especially where long-term value is concerned. For shorter-term investors, the stock will no doubt be an attractive name to try and time for a trade. Unfortunately, recent history is full of well-known companies that have broken under $5 a share -- and ultimately perished.
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