You’d Have This Much Money Now if You’d Invested $1,000 in PepsiCo 10 Years Ago
Written by
David Nadelle
Edited by
Nicholas Morine
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Having a percentage of safe-haven stocks in your portfolio guaranteeing stable returns is always a good strategy, regardless of your investor profile and risk appetite. Safe havens, or defensive stocks, are considered investment necessities, and can be tied to utilities, healthcare and consumer goods and food and beverages.
When it comes to the last of these, PepsiCo, Inc. is as near a safe haven bet as you can find. Coca-Cola might be the undisputed soft drink leader in the U.S and throughout the world, but PepsiCo is the largest food and beverage business in the U.S. — and the second-largest in the world based on net revenue, profit, and market capitalization, behind only Nestlé.
There’s been a lot of activity surrounding Pepsi lately, from its decision to invest $400 million in two production plants in Vietnam, per Reuters, to Subway choosing Pepsi as its U.S. beverage supplier for the next 10 years, as PR NewsWire detailed, beginning Jan. 1, 2025. Now is a good time to take a look at PepsiCo as a viable investment option.
If You Invested $1,000 in PepsiCo in 2014, What Would Your Shares Be Worth in 2024?
Your shares would be worth $2,308.26 as of February 2024, according to the historical performance experts at Netcials. Looking at the 10-year period from Feb. 25, 2014, to Feb. 23, 2024, $1,000 back then would have bought you 13.61 shares at $73.46.
While not spectacular, returns for PepsiCo stock have been steady over the past 10 years. Your initial investment of $1,000 would have grown to $1,087.10 after a year, to $1,314.31 after four years, to $2,390.16 after eight and decreased slightly to $2,308.26 after a decade.
What motivates investors to buy PepsiCo shares is the attractive yields and reliable dividend growth. The company has paid out a dividend of around $17.22 the past three payouts. Per Netcials, by investing $1,000 in Pepsi 10 years ago, you could have accumulated a total dividend of $482 — again, as of February 2024.
Should You Buy PepsiCo Stock?
Morningstar regularly posts undervalued stocks to keep your eye on. A recent report has Pepsi sitting right behind Alphabet and right before Comcast in its top stock pick listing, with a four-star rating and five “best managers” owning the stock.
Although its recent performance has been less than adequate (in 2023’s fourth quarter, net revenue fell to $27.8 billion from nearly $28 billion in the prior-year period), per The Motley Fool, Morningstar is sufficiently encouraged with its potential room to grow.
“Following years of anemic growth due to operational missteps and underinvestments, management has worked to right PepsiCo’s ship, even amid COVID-19-related disruptions and inflation,” said Dan Su, Morningstar equity analyst covering the beverage sector.
“Thanks to the strong snack and beverage brands underpinning close retail relationships combined with its massive scale and bargaining edge, we rate the firm as wide-moat and don’t foresee this position as wavering,” Su added.
According to Benzinga, Pepsi was a high riser a week ago, climbing 3.5% to $170.40. Morningstar thinks Pepsi stock is worth $176. Meanwhile, the company recently announced a 7% dividend increase payable in June 2024 and Morgan Stanley analyst Dara Mohsenian has upgraded the price target to $190 for this dividend king.
PepsiCo owns some of the most well-known and enduring brands on the food and beverage market, like Aquafina, Cheetos, Doritos, Fritos, Gatorade, Lays, Mountain Dew, Pepsi, Quaker, Rockstar, Ruffles and Tostitos.
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