PEP
PEP — Consumer Defensive
Graham: 12
Buffett: 52
Lynch: 29
PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia...
Price ?
148.74
Market Cap ?
203.6B
P/E ?
28.22
P/B ?
10.50
Div Yield ?
3.74%
52W Range ?
127.60 - 163.65
200W MA ?
155.61
12
Graham-style buying rate (0-100)
Criteria breakdown
- ✓ Company size sufficient (large-cap) ? $203,636,555,776 — Uses market cap >= $2B as proxy
- ✗ Solid financial condition (CR>=2; LT debt <= NCAV) ? CR=0.91 | D/E=2.60 — Partial: checks current ratio; LT debt vs NCAV unavailable
- ✓ Uninterrupted dividends for 20 years ?
- ✓ No losses in last 10 years ? 10y window — Positive earnings for last 16y
- ✓ EPS growth >= 33% over 10 years ? ~89%
- ✗ Price-to-Book (P/B) <= 1.5 ? 10.50
- ✗ Price-to-Earnings (P/E) <= 15 ? 28.2 — Uses trailing P/E as proxy for 3y avg EPS
- ✗ Combined formula (P/E * P/B) <= 22.5 ? 296.4
- ✗ Margin of safety >= 20% ? -62% — Intrinsic via 5y avg EPS * 15
- ✗ High ROE maintained without excessive debt ? ROE=37.2% | D/E=2.60 — Approximate threshold ROE = 15%, D/E = 1.0
What is evaluated (Graham):
- Valuation discipline and buying below intrinsic value.
- Financial resilience: liquidity and prudent leverage.
- Consistent dividends and earnings over long horizons.
"The intelligent investor is a realist who sells to optimists and buys from pessimists." — Benjamin Graham
52
Buffett-style buying rate (0-100)
Criteria breakdown
- ✗ Positive and growing FCF (multi-year) ? 18,960,000,000 -> 17,825,000,000
- ✓ ROIC >= 12% sustained ? 22.7%
- ✓ High ROE (proxy for durable advantages) ? 37.2% — Consistency over years not checked
- ✗ Net profit margin >= 10% ? 7.8% — Derived from available financial filings
- ✗ Conservative leverage (D/E <= 1.0) ? 2.60
- ✓ Sustainable shareholder returns (dividend > 0%) ? 3.74% — Does not assess buybacks or payout safety
What is evaluated (Buffett):
- Durable advantages: high ROE, healthy margins.
- Balance discipline and shareholder friendly capital use.
- Positive free cash flow and efficient reinvestment.
"It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price." — Warren Buffett
29
Lynch-style buying rate (0-100)
Criteria breakdown
- ✗ PEG ratio (P/E / growth) <= 1.0 ? 3.56
- ✗ Positive multi-year EPS growth (per-year >= 10%) ? ~7.9%/yr
- ✗ Conservative leverage (D/E <= 0.5) ? 2.60
- ✓ Sustainable profitability (net margin >= 5%) ? 7.8%
- ✓ Earnings stability (no losses in 10y) ? 10y window
What is evaluated (Lynch):
- Growth at a reasonable price (PEG and EPS CAGR).
- Durable earnings with limited drawdowns.
- Conservative balance sheet and baseline profitability.
"Know what you own, and know why you own it." — Peter Lynch