PepsiCo Inc Retains Buy Recommendation

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- PepsiCo (NYSE: PEP) 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 revenue growth, reasonable valuation levels, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • PEP's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 2.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 35.1% when compared to the same quarter one year prior, rising from $1,488.00 million to $2,010.00 million.
  • Net operating cash flow has increased to $2,313.00 million or 19.41% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.89%.
  • The gross profit margin for PEPSICO INC is rather high; currently it is at 56.62%. 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 11.95% trails the industry average.

PepsiCo, Inc. operates as a food and beverage company worldwide. PepsiCo has a market cap of $130.6 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 23.2% year to date as of the close of trading on Friday.

You can view the full PepsiCo Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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