Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Beverages industry and the overall market, PEPSICO INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $3,871.00 million or 11.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.16%.
- PEPSICO INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PEPSICO INC increased its bottom line by earning $4.02 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($4.06 versus $4.02).
- The gross profit margin for PEPSICO INC is rather high; currently it is at 56.60%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.40% trails the industry average.
PepsiCo, Inc. engages in the manufacture and sale of snacks, carbonated and non-carbonated beverages, dairy products, and other foods worldwide. PepsiCo has a market cap of $107.66 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 18.6, above the S&P 500 P/E ratio of 17.7. Shares are up 3.3% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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