PEPSICO (PEP) is the leading global snack and beverage company that manufactures and markets a variety of salt and convenience snacks, carbonated and non-carbonated beverages and foods. The company operates through four segments: Beverages North America, Frito-Lay North America, PepsiCo International and Quaker Foods North America.
PepsiCo’s fourth quarter 2013 earnings were $1.05. This was better than expected with stronger than anticipated volume and top-line growth, as it attained its full year performance objectives. Revenues generated in 2013 were $66.4 billion and earnings before interest and taxes of $9.7 billion and $4.32 in earnings per share.
We believe the company can generate in excess of $10 billion in cash flow in 2014 with over $7 billion in free cash flow. PepsiCo’s return on equity exceeds 26% with an attractive 3% dividend yield. We continue to believe PepsiCo remains a solid long-term holding with a P/E multiple of 17x 2014 earnings.