PepsiCo Inc
🇺🇸 PEP · NYSE/NASDAQ · US7134481081
Consumer
USD 157.01 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
26.2
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 157.01 ÷ 6.00 = 26.2
TTM period through: 2025-12-31
Forward P/E (estimated): 18.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 26.2
Yield (Fwd)
3.62%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.64%
Net Debt/EBITDA (TTM)
2.6x
Latest quarter: 8.7x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 8.7x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
94.8%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 92.7%
Cash Flow Payout (TTM): 63.2%
FCF Coverage (TTM): 1.00x
ROE
42.9%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
16.4x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
PepsiCo is a premier global consumer staples leader operating a highly dominant duopoly in the snacks and beverage markets. While the company offers a highly reliable 3.64% dividend yield backed by stellar business fundamentals and defensive cash flows, current valuation multiples remain elevated and offer limited upside. Existing shareholders should maintain their positions to collect the reliable income, but new investors may want to wait for a more attractive entry point to secure a better margin of safety.
Sector Context
PepsiCo manufactures, markets, and sells a globally recognized portfolio of beverages, foods, and snacks. Within the consumer staples sector, companies with massive scale and deeply entrenched brands benefit from a wide economic moat, pricing power, and highly defensive, recurring cash flows that are ideal for long-term dividend investing.
Temporary Opportunity Identified
Macroeconomic headwinds, persistent inflation, and rising commodity costs driven by geopolitical tensions are creating near-term volume pressures in North America.
📊 Strategy Analysis
- • Exceptional brand moat and duopoly position in the global snacks and beverage market, driving an outstanding ROE of 42.85%.
- • Highly reliable dividend history with a 10-year CAGR of 7.5%, zero cuts, and an attractive 3.64% yield.
- • Strong financial stability with a manageable Net Debt/EBITDA of 2.62x, comfortably below the 3.0x threshold.
- • Resilient consumer staples business model provides steady cash flows despite current macroeconomic headwinds and volume pressures.
⚠ What to Watch
- • Elevated valuation with a TTM P/E of 26.16x, which significantly exceeds the strategy's target range of 8-15x and the acceptable 20x premium limit for monopolies.
- • Near-term volume challenges in North America combined with rising commodity costs (sugar, fertilizer) due to geopolitical tensions.
- • Free Cash Flow dividend coverage is tight at 1.00x, though this is mitigated by stable operations and historical cash flow predictability.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.