What PepsiCo's Earnings Mean for Mutual Fund Investors (PEP)

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What PepsiCo's Earnings Mean for Mutual Fund Investors (PEP)

Shauna O'Brien

|

PepsiCo company logo
Before the opening bell on Wednesday, PepsiCo (PEP) released its fourth quarter financial results. Here’s what the results mean for mutual fund investors.

Inside PEP’s Results

Earnings

The company reported earnings of $1.31 billion, or 87 cents per share, down from $1.74 billion, or $1.12 per share, a year ago. Adjusted earnings were $1.12 per share – above analysts’ estimate of $1.08 per share.

Revenue
Revenue dropped to $19.948 billion from $20.12 billion. Analysts expected to see revenue of $19.66 billion.

Outlook
PepsiCo expects to see earnings growth of 7% for FY2015. Analysts expect to see EPS of $4.75.

Snack Business Boosting Profits

While PepsiCo was negatively impacted by the strengthening dollar and restructuring charges, these expenses were offset by stronger sales of Frito-Lay snacks. From a valuation standpoint, PEP is trading at 21x 2015 earnings estimates, which is a bit pricey for investors, considering its flat revenue growth. Despite its sluggish sales, PEP may be an attractive stock for income-focused investors with its 2.87% dividend yield. With its earnings announcement today, the company announced that it will boost its dividend payout by 7.3%.

Mutual Funds to Watch

Investors interested in PEP may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in PEP.
Symbol Mutual Fund Stake
Liquid error: internal Vanguard Total Stock Market Index 1.69%
Liquid error: internal Vanguard 500 Index 1.08%
YACKX AMG Yacktman Service 0.81%

The Bottom Line

The funds listed above allow investors to gain exposure to PEP while remaining diversified. Investors interested in PEP may also be interested in Coca-Cola (KO) or Dr Pepper Snapple (DPS).

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PepsiCo company logo

What PepsiCo's Earnings Mean for Mutual Fund Investors (PEP)

Shauna O'Brien

|

Before the opening bell on Wednesday, PepsiCo (PEP) released its fourth quarter financial results. Here’s what the results mean for mutual fund investors.

Inside PEP’s Results

Earnings

The company reported earnings of $1.31 billion, or 87 cents per share, down from $1.74 billion, or $1.12 per share, a year ago. Adjusted earnings were $1.12 per share – above analysts’ estimate of $1.08 per share.

Revenue
Revenue dropped to $19.948 billion from $20.12 billion. Analysts expected to see revenue of $19.66 billion.

Outlook
PepsiCo expects to see earnings growth of 7% for FY2015. Analysts expect to see EPS of $4.75.

Snack Business Boosting Profits

While PepsiCo was negatively impacted by the strengthening dollar and restructuring charges, these expenses were offset by stronger sales of Frito-Lay snacks. From a valuation standpoint, PEP is trading at 21x 2015 earnings estimates, which is a bit pricey for investors, considering its flat revenue growth. Despite its sluggish sales, PEP may be an attractive stock for income-focused investors with its 2.87% dividend yield. With its earnings announcement today, the company announced that it will boost its dividend payout by 7.3%.

Mutual Funds to Watch

Investors interested in PEP may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in PEP.
Symbol Mutual Fund Stake
Liquid error: internal Vanguard Total Stock Market Index 1.69%
Liquid error: internal Vanguard 500 Index 1.08%
YACKX AMG Yacktman Service 0.81%

The Bottom Line

The funds listed above allow investors to gain exposure to PEP while remaining diversified. Investors interested in PEP may also be interested in Coca-Cola (KO) or Dr Pepper Snapple (DPS).

Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Read Next

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