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 solid stock price performance, increase in net income, reasonable valuation levels, good cash flow from operations and growth in earnings per share. 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 stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Beverages industry average. The net income increased by 17.4% when compared to the same quarter one year prior, going from $1,415.00 million to $1,661.00 million.
- Net operating cash flow has slightly increased to $3,361.00 million or 8.07% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.39%.
- PEPSICO INC has improved earnings per share by 19.1% in the most recent quarter compared to the same quarter a year ago. 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 reported lower earnings of $3.92 versus $4.02 in the prior year. This year, the market expects an improvement in earnings ($4.39 versus $3.92).
PepsiCo, Inc. operates as a food and beverage company worldwide. PepsiCo has a market cap of $121.53 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 19.9, above the S&P 500 P/E ratio of 17.7. Shares are up 15.3% 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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