Food and Beverage Sector Ideas

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>>> PepsiCo (PEP) -- In times of market turbulence, I believe it pays to have some mega-cap stalwarts in your portfolio that can weather any economic environment. In this regard, one of my favorite defensive names continues to be PepsiCo (NASDAQ:PEP). The global snacks and beverages leader once again demonstrated its resilience this quarter.


https://finance.yahoo.com/news/7-perfect-stock-picks-moody-204445345.html


PepsiCo delivered 10.4% revenue growth in Q2, surpassing expectations. Operating margins also rebounded to 11.6% from 10.1%. The company saw broad-based growth across its portfolio, with particular strength overseas. PepsiCo has incredible pricing power, managing double-digit price hikes amidst inflationary pressures. Additionally, volumes have remained resilient as customers continue to reach for PepsiCo’s diversified offerings.

Furthermore, PepsiCo anticipates 7.5% organic revenue growth for the full year. While the company does expect volumes to moderate, its scale, distribution reach, and brand equity provide confidence it can power through any economic slowdown. Notably, PepsiCo has an exceptional track record of steadily expanding earnings per share, targeting 7% annual growth.

Between its 2.9% dividend yield and frequent buybacks, PepsiCo also returns ample cash to shareholders. The stock may seem a bit pricey near 23-times forward earnings. But for a high-quality, defensive name like PepsiCo, I believe investors should pay up for the stability. This remains a core long-term holding.

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