PepsiCo Inc (PEP): Today's Featured Food & Beverage Laggard

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.

PepsiCo ( PEP) pushed the Food & Beverage industry lower today making it today's featured Food & Beverage laggard. The industry as a whole closed the day down 0.6%. By the end of trading, PepsiCo fell 82 cents (-1.1%) to $70.29 on average volume. Throughout the day, 5.1 million shares of PepsiCo exchanged hands as compared to its average daily volume of 5.5 million shares. The stock ranged in price between $70.09-$71.37 after having opened the day at $71.18 as compared to the previous trading day's close of $71.11. Other companies within the Food & Beverage industry that declined today were: Tofutti Brands ( TOF), down 11.3%, Tianli Agritech ( OINK), down 8.7%, Bridgford Foods Corporation ( BRID), down 6.7%, and Monster Beverage ( MNST), down 5.5%.
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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 $110.79 billion and is part of the consumer goods sector. The company has a P/E ratio of 18.8, equal to the average food & beverage industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Shares are up 7.2% year to date as of the close of trading on Tuesday. Currently there are 11 analysts that rate PepsiCo a buy, no analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates PepsiCo as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Reeds ( REED), up 5.8%, Seneca Foods Corp. Class A ( SENEA), up 4.4%, Limoneira ( LMNR), up 3.1%, and China Marine Food Group ( CMFO), up 2.9%, were all gainers within the food & beverage industry with Constellation Brands ( STZ) being today's featured food & beverage industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the food & beverage industry could consider PowerShares Dynamic Food & Beverage ( PBJ) while those bearish on the food & beverage industry could consider PowerShares DB Agriculture Sht ETN ( ADZ).

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