Pepsico Inc (NASDAQ: PEP)

Sector: Consumer Defensive Industry: Beverages - Non-Alcoholic CIK: 0000077476
Market Cap 221.63 Bn
P/B 10.86
P/E 26.90
P/S 2.36
ROIC (Qtr) 13.99
Div Yield % 3.47
Rev 1y % (Qtr) 5.61
Total Debt (Qtr) 49.18 Bn
Debt/Equity (Qtr) 2.41
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About

PepsiCo Inc., commonly known as PepsiCo, is a prominent player in the global food and beverage industry, operating in over 200 countries and territories worldwide. Established in Delaware in 1919 and later reincorporated in North Carolina in 1986, PepsiCo has built a reputation as a leading company in the production, marketing, and distribution of a diverse range of beverages and convenient foods. PepsiCo's primary business activities revolve around the production and distribution of branded snacks, such as potato chips, tortilla chips, and cheese-flavored...

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Investment thesis

Bull case

  • Operating cash flow of 12.09B provides exceptional 10.78x coverage of interest expenses 1.12B, showing strong debt service capability.
  • Operating cash flow of 12.09B provides exceptional 219.76x coverage of minority interest expenses 55M, showing strong core operations.
  • Operating cash flow of 12.09B provides strong 41.97x coverage of stock compensation 288M, indicating sustainable incentive practices.
  • Robust free cash flow of 8.20B exceeds capital expenditure of 3.89B by 2.11x, indicating strong organic growth funding capability.
  • Retained earnings of 72.79B provide full 1.72x coverage of long-term debt 42.32B, indicating strong internal capital position.

Bear case

  • Operating cash flow of 12.09B barely covers its investment activities of (6.88B), with a coverage ratio of -1.76, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 12.09B provides thin coverage of dividend payments of (7.64B) with a -1.58 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 9.16B provide limited coverage of acquisition spending of (3.35B), which is -2.73x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 11.31B show weak coverage of depreciation charges of 4.18B, with a 2.71 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of (4.98B) relative to working capital of (4.82B), which is 1.03x suggests concerning dependence on external funding for operational needs.

Segments Breakdown of Revenue (2025)

Statement, Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Beverages - Non-Alcoholic
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 KO Coca Cola Co 359.59 Bn 41.22 7.57 47.42 Bn
2 PEP Pepsico Inc 221.63 Bn 26.90 2.36 49.18 Bn
3 MNST Monster Beverage Corp 80.88 Bn 46.84 10.14 0.11 Bn
4 CCEP COCA-COLA EUROPACIFIC PARTNERS plc 48.53 Bn 20.84 1.97 12.58 Bn
5 COKE Coca-Cola Consolidated, Inc. 15.28 Bn 534.08 9.79 1.92 Bn
6 CELH Celsius Holdings, Inc. 10.33 Bn 399.18 4.86 0.86 Bn
7 KDP Keurig Dr Pepper Inc. 5.72 Bn 8.07 0.94 15.85 Bn
8 FIZZ National Beverage Corp 3.42 Bn 18.34 2.85 0.07 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.46 3.00
EV to Cash from Ops. EV/CFO 21.87 25.34
EV to Debt EV to Debt 5.38 82.79
EV to EBIT EV/EBIT 23.37 35.67
EV to EBITDA EV/EBITDA 16.86 24.62
EV to Free Cash Flow [EV/FCF] EV/FCF 32.24 40.15
EV to Market Cap EV to Market Cap 1.19 2.70
EV to Revenue EV/Rev 2.81 3.95
Price to Book Value [P/B] P/B 10.86 15.38
Price to Earnings [P/E] P/E 26.90 112.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.08 -230.19
Dividend Payout Ratio % Div Payout % (Qtr) 93.40 -1.98
Dividend per Basic Share Div per Share (Qtr) 5.62 0.88
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 93.87 30.31
Interest Coverage Int. cover (Qtr) 10.09 3.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 21.89 -59.79
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 7.69 125.83
Dividend Growth (1y) % Div 1y % (Qtr) 5.50 -6.02
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -11.35 -5.50
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -6.14 4.45
EBIT Growth (1y) % EBIT 1y % (Qtr) -11.76 70.95
EBT Growth (1y) % EBT 1y % (Qtr) -14.36 3.85
EPS Growth (1y) % EPS 1y % (Qtr) -13.63 5.85
FCF Growth (1y) % FCF 1y % (Qtr) 8.88 19.77
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.49 12.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.87 1.15
Cash Payout Ratio Cash Payout (Qtr) 0.48 0.16
Cash Ratio Cash Ratio (Qtr) 0.28 0.76
Current Ratio Curr Ratio (Qtr) 0.85 1.78
Debt to Equity Ratio Debt/Equity (Qtr) 2.41 1.22
Interest Cover Ratio Int Coverage (Qtr) 10.09 3.00
Times Interest Earned Times Interest Earned (Qtr) 10.09 3.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.50 9.71
EBIT Margin % EBIT Margin % (Qtr) 12.04 6.85
EBT Margin % EBT Margin % (Qtr) 10.85 5.02
Gross Margin % Gross Margin % (Qtr) 54.10 40.60
Net Profit Margin % Net Margin % (Qtr) 8.80 2.49