PepsiCo: The Alternative to Coca-Cola

Last Updated: 13. November 2023By

I have reported here in the „Schlussgong“ before: For months, the so-called „weight-loss injection“ of the Danish pharmaceutical company Novo Nordisk has been causing a stir.

While the Novo Nordisk share, which has been on the recommendation list of my stock exchange service „The Depot Optimizer“ for some time, is climbing from high to high, the hype about the slimming agents has resulted in price losses for the manufacturers of sweets and snacks.

This is also the case with PepsiCo (also on the recommendation list of the „Depot Optimizer“ as a dividend classic). The reaction, in my opinion, is exaggerated. The weight-loss injection ensures that a feeling of satiety sets in faster. In my opinion, however, this will not seriously affect PepsiCo’s business. Therefore, the recent price correction makes the share even more attractive from a fundamental point of view.

PepsiCo: Beverage Giant and Snack Specialist Founded in 1898, the company from Purchase, New York, now employs around 315,000 employees. In addition to non-alcoholic beverages, PepsiCo is well positioned in the food sector. The product range includes soft and energy drinks, coffee, tea and water, snacks such as chips and tortillas with the matching sauces and dips, as well as cereals, rice and pasta products, syrups, porridge and corn flour.

Pepsi has been growing steadily for years and has increased its dividend for 51 consecutive years. This fantastic series shows how reliable the business model works. With well-known brands such as 7Up, Mirinda, Tropicana, Gatorade or Frito-Lay, the group has enormous pricing power, which is particularly advantageous in times of high inflation.

Profit forecast raised after good quarterly figures With its recently presented figures, Pepsi once again succeeded in convincing. In the 3rd quarter, sales increased by 7% to 23.45 billion dollars. Net income improved by 14% to 3.09 billion dollars. At the presentation of the figures, the management once again raised its forecast for the full year.

For the earnings per share adjusted for one-time effects, PepsiCo now expects an increase of 13%, instead of 12% previously. Organic sales growth is expected to be 10%, as planned. The company also signaled that it will reach the top end of the forecast range in the new financial year 2024.

Walmart CEO John Furner had said in an interview that the increased use of weight loss medications had led to changes in consumer buying habits.

Pepsi CEO Ramon Laguerta was able to allay these concerns: In a telephone conference, Laguerta said that the effects of the weight loss drugs on PepsiCo’s business are so far negligible. In addition, the US group has been focusing on lower sugar and sodium products for years.

Against this background, it should only be a matter of time before the PepsiCo share makes up for the recent dip. Those looking for an alternative to the dividend classic Coca-Cola (already presented several times in the „Schlussgong“) can therefore take a look at the perennial rival Pepsi.