PepsiCo cuts its sales forecast

Article Excerpt

PEPSICO INC. $173 is a hold. The company (Nasdaq symbol PEP; Conservative-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding: 1.4 billion; Market cap: $242.2 billion; Dividend yield: 3.1%; Dividend Sustainability Rating: Above Average; www.pepsico.com) is the world’s second-largest soft-drink maker after Coca-Cola. Its other brands include Frito-Lay snacks, Gatorade sports drinks, and Quaker Oats cereals. With the June 2024 payment, PepsiCo raised your quarterly dividend by 7.1%, to $1.355 a share from $1.265. The annual rate of $5.42 a share yields 3.1%. The company has now increased the dividend annually for the past 52 years. PepsiCo now expects its sales to improve by 1% to 2% in 2024. That’s down from its previous guidance of 4% growth. The company also expects earnings will rise 7% to $8.15 a share; the stock trades at a reasonable 21.2 times that estimate. Still, cost-conscious consumers continue to buy less soda and snacks and to switch to cheaper brands PepsiCo is a hold. hold…