Investing in PepsiCo (& Starbucks) - The Effect of Covid-19 Pandemic | Investment Series

The Pandemic Story

With people stuck at home due to the Covid-19 pandemic, more people are turning to comfort food.

Due to this, the sales of snacks has increased in 2020 vs 2019.

One of the best seller of PepsiCo is Lays.

This is one of the snacks that I really like.

We know that PepsiCo is one of a strong brand out there has a long history.

It's main competitor is Coca-Cola.

However, PepsiCo also has many brands under its belt that you may not be aware.

It owns Pepsi, Lays, Quaker Oats, Fritos, Doritos, Mountain Dew, Mirinda, Lipton, 7Up, Cheetos, Tropicana, Gatarode and many more. 

And one fun facts:

Do you know that PepsiCo and Starbucks formed a partnership in 1994?

Frappucino, a famous Starbucks products are the introduced through this partnership.

Today, they dominate a huge market share for Ready to Drink (RTD) market.

Starbucks provides the coffee, PepsiCo helps to distribute the coffee through it's wide network.

It is a win-win partnership.

Financial Health

The market cap of PepsiCo is at USD$ 196 billion.

With beta of 0.61, the volatility is low.

This is normally treated as a defensive stock.

Net income has been growing steadily for the past 4 years.

In Dec 2020, it generated a revenue of USD 70 billion.

This is higher than Dec 2019 by USD 3 billion.

Impressive numbers.

Note that in 2020, it generated USD 2 billion through its ecommerce sales as well.

Looking at the valuation analysis by Simply Wall Street, the share price is undervalued by about 9.2%.

Currently it is giving a dividend yield of about 2.9%. A decent number for an US stock.

PepsiCo payout 78% of its earnings as dividend.

The Share Price Performance

The stocks has been giving good a long term growth to all its investors for the past 10 years.

The History

PepsiCo was founded by Don Kendall and Herman Lay.

Now you know why there is a snacks called Lays.

It was names after one of its founder.

One of the famous CEO of PepsiCo is Indra Nooyi.

She was the one that involves in acquiring multiple brands for PepsiCo.

To end this article, watch some inspirational videos from Indra Nooyi, the former CEO of PepsiCo.

After watching the video, you probably will understand why PepsiCo is so successful today.

What do you think of PepsiCo?

Would you consider to invest in this stock?

Tell us your opinion in the comment below.

Reference

https://www.pepsico.com/

https://pepsicopartners.com/PEPSICO-BRANDS/STARBUCKS%C2%AE/c/brand_starbucks

https://stories.starbucks.com/press/2016/fact-sheet-starbucks-and-pepsico-partnership/

https://en.wikipedia.org/wiki/Indra_Nooyi

Happy Investing! 😉