13 June 2017

Pepsico

Pepsi was first introduced in 1893, the creation of a US pharmacist who sought to invent a drink designed to boost energy

by John Royden

Head of Research

Group 10Created with Sketch.
Price
£1.18
Group 11Created with Sketch.
52 Week High-Low
£1.18 – £0.98
Page 1Created with Sketch.
Net Yield
2.55%
Group 12Created with Sketch.
Hist / Pros Per
24.1– 22.9
Page 1Created with Sketch.
Equity Market Cap
£168,434m

Pepsi was first introduced in 1893, the creation of a US pharmacist who sought to invent a drink designed to boost energy. Success came in the midst of the great depression in 1936, when they aired a popular ad campaign encouraging price comparison between Pepsi and their main rival throughout history, Coca Cola. 

PepsiCo, Inc. was established through the merger of Pepsi-Cola and Frito-Lay in 1965. This merger brought with it many well-known brands including Lays and Doritos. 

Other than their main Pepsi brands, Mountain Dew and Gatorade have enjoyed a leading position in the US market, prompting them to expand further afield. Gatorade, obtained thanks to the Quaker Oats merger in 2001, commands a leading 29% share in the fast growing global sports and energy drinks market.

M&A has been fairly quiet in recent years, which CEO Indra Krishnamurthy Nooyi says is because they haven’t found that ‘gem’ of a company yet. They certainly have the financial firepower to make an acquisition. PepsiCo generated $7.4 billion in free cash flow in 2016, created in part by billions of dollars in cost saving measures since 2010 and steady top line growth. With c.$9.2 billion in cash on their balance sheet, perhaps they are preparing themselves for something industry-changing. 


Related articles

Edwards Lifesciences’ roots date to 1958, when Miles Edwards set out to build the first artificial heart.

We have all heard of eBay and PayPal. eBay used to own PayPal before spinning it off as its own entity in 2015.

Pearson supplies courseware to students globally.