Since the epidemic bottom, Pepsico stock (NASDAQ: PEP) has been behind the overall market, but that may change. Although the stock trades at close to 24X earnings, the company’s success may be correlated with this high valuation, which is justified given the business’s numerous appealing characteristics for investors. 

Market Analysis of Pepsico Stock

With a beta of 0.57, Pepsico stock (NASDAQ: PEP) is roughly half as volatile as the whole market, yet market volatility is already increasing. Pepsico stock (NASDAQ: PEP) is a better option than an index-tracking ETF since Pepsico’s beta is lower than that of the larger Consumer Staples sector (NYSEARCA: XLP). The lesson is that Pepsico is a dividend-growth company that is successful in a successful industry and has some protection against a market slump.

Our positive results show that our efforts to grow into an even faster, stronger, and better organization with pep+ at the core of all we do are paying off. We continue to be dedicated to investing in our people, brands, supply chain, and go-to-market processes in order to grow and succeed in the market. We are excited by the success we are making on our strategic agenda.

Pepsico Stock Has Strong Sell-Side Market Support

Due to upward trends in institutional activity and analyst opinion, Pepsico stock (NASDAQ: PEP) looks to have strong market support. Price target cuts were made in the weeks leading up to the FQ3 results announcement, although this should have changed by the time the report was released. The 12-, 3-, and 1-month comparisons show that the Marketbeat.com average recommendation is a Moderate Buy, with a price target of $184.50.

The Q3 results, in terms of organic growth, capital gains, and capital returns, are consistent with the long-term investment philosophy. The business posted net sales of $21.97 billion, an increase of 8.8% over last year, which was 550 basis points higher than the average forecast. Despite a 300 basis point headwind from foreign exchange, the strength was driven by growth across all sectors, with Quaker, Frito Lay NA, and Latin America taking the lead. Sales are up 16% organically, and higher margins are also present.

PepsiCo is on track to achieve capital gains.

In F22, PepsiCo maintained its forecast for capital returns, keeping it on pace to increase the dividend in the coming summer. The business claims to have $344 million, or around 0.15% of the market value, remaining for the fiscal year and would distribute $7.7 billion in dividends and share repurchases.

The payout ratio, which is a tad high at 67% but still within acceptable bounds for a Dividend King, indicates that the dividend is secure. Competitor The Coca-Cola Company (NYSE:KO) has a lower distribution CAGR and a higher payout ratio while paying a higher dividend. Despite having a similar 0.57 5-year monthly beta, The Coca-Cola Company is undoubtedly more volatile than Pepsico stock (NASDAQ:PEP) in the post-pandemic era.