# PepsiCo, Inc. (PEP) — Stock CV

PepsiCo, Inc. is a $172B consumer staples company. Revenue grew 6.4% over the last year, it keeps 11¢ of every dollar of sales as profit, and its net debt equals ~3.8 years of free cash flow. It trades at 16.5× earnings — near the lowest of its own history.

> PepsiCo is a global leader in snacks and beverages, owning well-known household brands including Pepsi, Mountain Dew, Gatorade, Lay's, Cheetos, and Doritos, among others.

## Identity

- **Ticker**: PEP
- **Sector**: Consumer Defensive
- **Industry**: Beverages
- **Headquarters**: PURCHASE, NY
- **Employees**: 306 000
- **Website**: https://www.pepsico.com
- **Market cap**: $172B
- **Last price**: $126.05
- **Financial profile**: Strained

## Vitals (TTM)

- **Revenue**: $98.2B
- **Net income**: $10.9B
- **Free cash flow**: $10.5B
- **Net debt**: $39.7B
- **P/E**: 16.5
- **Revenue growth (YoY)**: 6.4%

## Skills (profile scores, 0–100)

| Pillar | Score |
|---|---|
| Valuation | 90 |
| Growth | 30 |
| Profitability | 77 |
| Health | 36 |
| Quality | 87 |
| Moat | 88 |

## Qualifications (beginner checklist) — 9 of 11 passed

- [x] Revenue growing — +6.4% YoY
- [x] Profitable — $10.9B TTM
- [ ] Profit growing — -2.2% YoY
- [x] Generates cash — $10.5B TTM
- [x] Debt under control — ~3.8y of cash flow to repay
- [x] Established company — $172B market cap
- [x] Not printing shares — -1.4% shares over ~5y
- [x] Proven track record — 10/10 profitable years
- [ ] Financially stable — health score 31/100
- [x] Pays a dividend — yield 4.54%
- [x] Valuation not extreme — P/E 16.5

## Experience (career milestones)

- **2020** — PepsiCo announced that it had entered into agreement to acquire Rockstar Energy for US$3.85 billion
- **Dec 2, 2019** — PepsiCo acquired the snacks brand, BFY Brands, who were then folded into the Frito-Lay division
- **FY2018** — Best year on record: $12.5B net income
- **Aug 20, 2018** — PepsiCo announced that it had entered into agreement to acquire SodaStream
- **FY2016** — Profitable every year on record: 10 consecutive profitable years in our data
- **FY2016** — Revenue already above $50B: $62.8B in first reported year
- **FY2016** — Positive free cash flow every year since: 10-year streak
- **2015** — PepsiCo also introduced Stubborn Soda, a line of carbonated beverages without high fructose corn syrup
- **2011** — When it acquired the remaining 23% stake of Wimm-Bill-Dann Foods in October 2011, PepsiCo became the largest food…
- **2010** — This acquisition was completed in 2010, resulting in the formation of a new wholly owned subsidiary of PepsiCo,…
- **2009** — PepsiCo made a US$7 billion offer to acquire the two largest bottlers of its products in North…
- **2001** — Acquired Quaker Oats: $13.4B — the prize was Gatorade
- **1998** — PepsiCo purchased the orange juice company Tropicana Products in 1998
- **1975** — The Pepsi Challenge: blind taste tests vs Coke — the cola wars escalate
- **1965** — PepsiCo formed: merger with Frito-Lay — drinks meet snacks
- **1965** — PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc., PepsiCo has since expanded…
- **1898** — Brad's Drink becomes Pepsi-Cola: pharmacist Caleb Bradham in New Bern, NC

## Strengths

- High gross margin (54.2%)
- Interest covered 10.2× by operating earnings
- High returns on invested capital (ROIC 15.2%)

## Watch-outs

- None stand out in the data.

## Track record

| Year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2021 | $79.5B | $7.62B | $6.99B |
| FY2022 | $86.4B | $8.91B | $5.60B |
| FY2023 | $91.5B | $9.07B | $7.92B |
| FY2024 | $91.9B | $9.58B | $7.19B |
| FY2025 | $93.9B | $8.24B | $7.67B |

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Source: https://stockcv.com/PEP — derived from company filings; may be delayed or incomplete. Information, not investment advice.