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Analyzing PepsiCo’s Performance in the Competitive Market

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PepsiCo and its peers

An analysis of PepsiCo’s (PEP) income statement for 3Q15 is as follows:

  • The net profit margins of PepsiCo, The Coca-Cola Company (KO), Unilever (UN), Mondelez International (MDLZ), and Dr Pepper Snapple Group (DPS) are 3.3%, 25.6%, 9.9%, 5.6%, and 13.3%, respectively.
  • The EPS (earnings per share) of PepsiCo, Coca-Cola, Unilever, Mondelez, and Dr Pepper Snapple are $0.36, $0.71, $0.87, $0.25, and $1.14, respectively.

An analysis of PepsiCo’s balance sheet for 3Q15 is as follows:

  • The current ratios of PepsiCo, Coca-Cola, Unilever, Mondelez, and Dr Pepper Snapple are 1.2, 1.1, 0.68, 0.71, and 0.81, respectively.

An analysis of PepsiCo’s valuation is as follows:

  • The PE (price-to-earnings) ratios of PepsiCo, Coca-Cola, Unilever, Mondelez, and Dr Pepper Snapple are 22.4x, 24x, 22.1x, 34.6x, and 22.3x, respectively.
  • The PBV (price-to-book value) ratios of PepsiCo, Coca-Cola, Unilever, Mondelez, and Dr Pepper Snapple are 8.8x, 6.3x, 6.9x, 2.9x, and 6.9x, respectively.
  • The PS (price-to-sales) ratios of PepsiCo, Coca-Cola, Unilever, Mondelez, and Dr Pepper Snapple are 2.2x, 3.9x, 2.2x, 2.2x, and 2.5x, respectively.

According to the above findings, competitors have outperformed PepsiCo based on net profit margin and EPS. However, PepsiCo is far ahead of its competitors based on its current ratio and PBV.

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ETFs that invest in PepsiCo

The Fidelity MSCI Consumer Staples ETF (FSTA) invests 7.4% of its holdings in PepsiCo. The ETF tracks a market-cap–weighted index of stocks in the US consumer staples sector.

The Vanguard Consumer Staples ETF (VDC) invests 6.9% of its holdings in PepsiCo. The ETF tracks a market-cap–weighted index of stocks in the consumer staples sector of the US market.

The iShares Dow Jones US Consumer Goods Sector Index ETF (IYK) invests 6.7% of its holdings in PepsiCo. The ETF tracks a market-cap–weighted index of stocks in the US consumer goods sector.

PepsiCo and its ETFs

An analysis of PepsiCo’s price movement is as follows:

  • The year-to-date price movements of PepsiCo, FSTA, VDC, and IYK are 4.9%, -0.18%, 1.9%, and 2.4%, respectively.

An analysis of PepsiCo’s valuation is as follows:

  • The PE (price-to-earnings) ratios of PepsiCo, FSTA, VDC, and IYK are 22.4x, 21.9x, 22.1x, and 20.7x, respectively.
  • The PBV (price-to-book value) ratios of PepsiCo, FSTA, VDC, and IYK are 8.8x, 4.6x, 4.5x, and 4.4x, respectively.

Thus, based on price movement, PE, and PBV, PepsiCo is far ahead of the ETFs that invest in it.

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