Thursday, November 5, 2015
PepsiCo Inc.: You're Paying Up For This Consumer Staple
Consumer staples companies are the bread and butter of the dividend growth philosophy. The biggest reason for that is the consistency in their operations. In general they have rather inelastic demand compared to other sectors of the economy and for the companies with strong brands they have excellent pricing power. You might put off the purchase of a new car if the economy isn't firing on all cylinders but are you really going to stop eating or bathing?
PepsiCo (NYSE:PEP) is a fine example of an excellent consumer staple company with brand recognition, pricing power and even better growth. Forbes even recognized PepsiCo as the 29th Most Valuable Brand earlier this year and I expect PepsiCo to continue moving forward.
Historically, PepsiCo has been a wonderful investment with 43 consecutive years of dividend growth. Every dollar you invested 10 years ago has turned into $2.26 today. Every dollar invested 20 years ago has turned into $6.31 today and every dollar invested 30 years ago has turned into $55.94 today. That's an impressive record and I'm glad to call myself an owner (too bad my shares weren't purchased 30 years ago though).
Continue reading the PepsiCo quick analysis on Seeking Alpha.
For more detailed analyses check out my Stock Analysis page.