PepsiCo Inc

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PEP : NYSE : Consumer Goods
$108.92 up 0.79 | 0.73%
Today's Range: 108.12 - 109.11
Avg. Daily Volume: 4,513,900
07/29/16 - 4:04 PM ET

Financial Analysis


PEPSICO INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. PEPSICO INC has average liquidity. Currently, the Quick Ratio is 1.13 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 25.00% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)15395.015923.0
EBITDA ($mil)3573.03514.0
EBIT ($mil)3010.02935.0
Net Income ($mil)2005.01980.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)13379.09579.0
Total Assets ($mil)72711.072262.0
Total Debt ($mil)35621.031458.0
Equity ($mil)12248.016332.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin59.1857.98
EBITDA Margin23.222.06
Operating Margin19.5518.43
Sales Turnover0.860.9
Return on Assets7.139.02
Return on Equity42.3439.91
Debt Q2 FY16 Q2 FY15
Current Ratio1.41.07
Debt/Capital0.740.66
Interest Expense255.0217.0
Interest Coverage11.813.53


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1441.01472.0
Div / share0.750.7
EPS1.381.33
Book value / share8.511.1
Institutional Own % n/a n/a
Avg Daily Volume4536714.04924627.0

Valuation


BUY. PEPSICO INC's P/E ratio indicates a premium compared to an average of 30.50 for the Beverages industry and a premium compared to the S&P 500 average of 25.05. For additional comparison, its price-to-book ratio of 12.77 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 7.99. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. After reviewing these and other key valuation criteria, PEPSICO INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PEP 30.59 Peers 30.50   PEP 14.56 Peers 22.23

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

PEP is trading at a valuation on par with its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PEP is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
PEP 21.06 Peers 26.78   PEP 1.03 Peers 1.35

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

PEP is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

PEP trades at a discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PEP 12.77 Peers 7.99   PEP -18.02 Peers -6.24

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PEP is trading at a significant premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, PEP is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PEP 2.52 Peers 4.70   PEP -4.80 Peers -4.95

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PEP is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

PEP significantly trails its peers on the basis of sales growth

 

 

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