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How has PepsiCo’s stock fared against rivals?

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Dec. 4 2020, Updated 10:52 a.m. ET

Leading position

PepsiCo’s (PEP) stock competes with several companies across the food and beverage categories. In this article, we’ll discuss PepsiCo’s stock movement and valuation against the company’s key rivals, including Coca-Cola (KO), Dr Pepper Snapple Group (DPS), Mondelez International (MDLZ), Kellogg (K), and the consumer sector in general. The SPDR S&P 500 ETF (SPY) has 9.69% holdings in the consumer staples sector as of February 20, 2015.

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And the winner is…

PepsiCo’s stock has appreciated by 20.7% since 2014 and has outperformed peers in the consumer staples sector like Coca-Cola, Mondelez, and Kellogg, which are up by 3.2%, 6.2%, and 5.4%, respectively. However, PepsiCo’s smaller beverage rival, Dr Pepper Snapple, has beaten even PepsiCo and has appreciated by 65.3% since 2014. Dr Pepper Snapple has delivered higher growth in adjusted earnings per share (or EPS) in fiscal 2014 compared to the beverage giants.

Over the past year, PepsiCo stock has performed better than the Consumer Staples Select Sector SPDR Fund (XLP) and the market in general.

Relative valuation

PepsiCo is currently trading at a price-to-earnings (or PE) multiple of 21.2, almost on par with beverage rival Coca-Cola and snack food rival Mondelez. The company’s valuation is higher than the S&P 500 Consumer Staples Sector Index (XLP). PepsiCo’s revenues and adjusted EPS for fiscal 2014 increased by 0.4% and 5.9%, respectively.

2015 guidance

For fiscal 2015, PepsiCo expects unfavorable currency movements to impact its net revenue as well as adjusted earnings per share (or EPS) by 7 percentage points. The company expects to generate over $10 billion in cash flow from operating activities and over $7 billion in free cash flow, excluding certain items. Net capital expenditure is expected to be around $3 billion in 2015.

To know more about the company, read Market Realist’s PepsiCo company overview.

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