Pepsico Is The Most Valuable Brand

1155 Words Jul 21st, 2016 5 Pages
PepsiCo operates in the beverages/soft drinks industry in the consumer goods sector (Yahoo! Finance, 2016). According to Forbes, PepsiCo is rated 29th as the most valuable brand (Forbes, 2016). While Coca-Cola has mostly stayed within the boundaries of the beverage/soft drink industry, only venturing out from soft drinks to include sport drinks, energy waters, and most recently tea and coffee, PepsiCo has done that in addition to adding snack foods to its distribution. PepsiCo has significant holdings in the snack food industry including brands such as Tostitos, Lays, Ruffles, Cheetos, Sabra, and Quaker just to name a few (PepsiCo, 2016a). Much like Coca-Cola, PepsiCo’s business is seasonal as cold drinks have increased sales in the summer, whereas warm drinks have higher sales in the winter (PepsiCo, 2016a). PepsiCo’s diversification in the snack foods industry does provide some balance.
Assessment of PepsiCo Financial Statements
Financing Activities, Dividend Payout and Retention Ratio As indicated with Coca-Cola, the key indicators can be reviewed in Table 7. Although Coca-Cola’s dividend payout ratio was increasing at a rate unsustainable relative to the increase in free cash flow, PepsiCo paints a different picture. In fact, the increase in free cash flow is sufficient to cover the increase in dividend payments. Additionally, PepsiCo, like Coca-Cola has a history of dividend payments. The annual dividend rate of PepsiCo for FYE 2016 is 3.012, an…
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