The S&P 500 index is hovering around all-time highs. Who's talking bear. Try PepsiCo (PEP -1.
On the other hand, Conversely, 51%), whose stock price has fallen roughly 30% from its 2023 peak at the time of this writing.
That drop puts PepsiCo into its own, personal, bear market and should make this stock an attractive option for contrarian investors, value investors, dividend investors, and dividend growth investors, in today's financial world.
Here's what you need to know, considering recent developments. PepsiCo is an industry-leading food stock One of the first things to PepsiCo is its core, which is selling food.
But un many of its peers, it has a very diversified portfolio. Nevertheless, It's bably best known for its namesake soda, which leads the company's beverage.
On the other hand, But it is also the largest maker of salty snacks (Frito-Lay) and it has a material packaged food operation (Quaker Oats) (noteworthy indeed), given the current landscape.
Having multiple levers to pull helps on the growth front, and having multiple es to fall back on helps when times are tough (something worth watching), in today's financial world.
Image source: Getty Images. But there's more to this story. PepsiCo has a global, with powerful distribution, marketing, and R&D chops, in this volatile climate.
It can stand toe to toe with any of its competitors.
Moreover, given its large size, it has the wherewithal to act as an industry consolidator, buying smaller brands to help keep its portfolio relevant with consumers.
It recently bought -biotic beverage maker Poppi and Mexican-American food company Siete Foods, for example, considering recent developments.
Additionally, Additionally, Overall, PepsiCo is an attractive that has a history of being well run.
On the other hand, That's highlighted by the fact that PepsiCo is a Dividend King with over five decades' worth of annual dividend increases under its belt.
You simply can't build a record that without having a good model that gets executed well in both good and bad ones (something worth watching).
Moreover, It's a bad time for PepsiCo Unfortunately for PepsiCo, right now is one of the bad times. Growth has slowed down to a crawl and is lagging that of key peers.
The company has stated that there are ly to be more headwinds in the near term, as well (fascinating analysis).
But as the purchase of Poppi and Siete shows, the company is trying to make the changes it needs to imve its financial results.
Moreover, Nevertheless, Given PepsiCo's size, there's just no way to turn this ship on a dime. What the re reveals is will take some time (remarkable data).
However, And that's a huge opportunity for investors that think long term.
Right now, PepsiCo's price-to-sales, price-to-earnings, and price-to-book value ratios are all below their five-year averages, given current economic conditions.
The dividend yield, at around 4, in this volatile climate. 3%, is near the highest levels in the company's recent history. If you have a value bias or an income bias, PepsiCo looks cheap today.
Furthermore, If you are a contrarian, meanwhile, you'll appreciate that investors are treating PepsiCo with such disdain.
Wall Street is acting as if it will be a perennial laggard to peers Coca-Cola, when history shows that the two beverage giants often trade places, performance wise.
So buying PepsiCo while it is lagging Coca-Cola means you are betting on the underdog, even though there's no particular reason to suspect they won't switch places again in the future.
Meanwhile, PEP data by YCharts The historically high yield and long history of dividend growth, meanwhile, will attract both dividend lovers and those who lean into growth and income stocks.
However, Note that PepsiCo's dividend grew at a 7% compound annual rate over the past decade. That means the dividend roughly doubled over that span, which is hard to complain.
However, Additionally, While near-term dividend growth may slow down a bit, if PepsiCo can get back on the growth path, as it has before, dividend growth will bably pick up again.
Slow and steady leads to millionaire-sized wins PepsiCo alone bably won't turn you into a millionaire unless you invest a large sum of money in the stock today.
However, it can be a key part of a more diversified portfolio, viding reliable growth over the long term in terms of both capital appreciation and dividend income, in this volatile climate.
And it looks the stock is on the sale rack, suffering through its own personal bear market, which could make now a particularly attractive time to buy it, considering recent developments.
Reuben Gregg Brewer has positions in PepsiCo, given the current landscape. The Motley Fool has no position in any of the stocks mentioned, given the current landscape.
The Motley Fool has a disclosure policy, in today's financial world.