Thursday, February 20, 2014

Recent Buy PepsiCo Inc. PEP

19th February 2014 I Bought 100 shares of PEP at $77.65 per share plus comission.

PepsiCo, Inc. (PepsiCo) is a global food and beverage company. Through the Company's bottlers, contract manufacturers and other partners, it makes, markets, sells and distributes a range of foods and beverages in more than 200 countries and territories. PepsiCo is organized into four business units: PepsiCo Americas Foods (PAF), which includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of its Latin American food and snack businesses (LAF); PepsiCo Americas Beverages (PAB), which includes all of its North American and Latin American beverage businesses; PepsiCo Europe, which includes all beverage, food and snack businesses in Europe and South Africa, and PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa. It manufactures markets and sells a range of salty, sweet and grain-based snacks, carbonated and non-carbonated beverages, dairy products and other foods. 

PepsiCo Inc. reported fourth-quarter and full-year 2013 results Thursday, 13 February. For the quarter, the food and beverage company posted adjusted diluted earnings per share (EPS) of $1.05 on revenues of $20.12 billion. In the same period a year ago, the company reported EPS of $1.09 on revenues of $19.95 billion. The quarterly results also compare to the Thomson Reuters consensus estimates for EPS of $1.01 and $20.16 billion in revenues. For the full year, Pepsi posted EPS of $4.37 on revenues of $66.15 billion, compared with EPS of $4.10 on revenues of $65.49 billion in 2012. The consensus estimates called for EPS of $4.34 on revenues of $66.47 billion. 
Pepsi raised its annual dividend from $2.27 a share to $2.62, effective in June, and said it plans to repurchase approximately $5 billion in stock during 2014. The company said the combined effect of these programs will return about $8.7 billion to stockholders in 2014.
In its outlook, Pepsi expects to grow adjusted EPS by 7% in 2014, which translates to EPS of $4.68, a penny below the current consensus estimate. The company also expects organic revenue growth in the mid-single digits and productivity savings of $1 billion. Pepsi expects commodity price inflation in the low single-digit range for 2014.

I thought of taking advantage of it and I bought PepsiCo to my portfolio. I still believe that PEP is able to pay a growing dividend to its owners.

PEP is a Dividend Champion with an 41 year streak of dividend increases. (DividendChampions.xls) It pays quarterly dividends of $0.5675 per share, (from June 2014 $0.655) in March, June, September and January.

PEP's earnings per share have moved steadily upwards, except a small dip in 2005, 2008 and 2012

Some ratings for PEP:

    Yahoo:  Mean Recommendation 2.2, 1y Target Est $91.40
    Reuters: Mean Rating 2.14
    Morningstar:  (****)

My last purchase 100 shares of PEP increase €142.42 ($195.19) of expected annual dividend net income, which increases my portfolio projected annual dividend net income to €6666.07. With purchase price $77.65 plus commission my starting yield on cost is 3.37%.

Full Disclosure: Long PEP


  1. I'm a big fan of PEP. I haven't jumped in with a purchase yet but may soon. I love the Doritos so I need to profit off my bad habits!

  2. Thats a good yield-on-cost. I need to start picking up some of either KO or PEP. But for now, Im trying to build up my cash positions.

  3. Nice buy DH!

    Congratulations on the increased annual dividend income. I really like both KO and PEP right now and I think going forward even if sugary beverages become less popular PEP will do well with its massive snack business.

  4. That's awesome! I added some more PEP this morning. I really like where things are headed and if sodas continue to be demonized here in the US, PEP is much better suited to not be effected as much because of their huge snack business.