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Coca-Cola And Pepsi

Ramjee Prasad
10804900
RH6802B54
B.Tech ECE LEET(3rd Year)

Coca Cola

Pay

Exercised

Index Membership:

Dow Jones Composite


Dow
Industrials
S&P
100 $ 0
S&P
500
S&P 1500 Super Comp

Sector:

Consumer Goods

$0

Industry:

Beverages - Soft Drinks

$0

Employees (last reported count):

92,400

$0

Mr.

Alexander

Benedict

Cummings

Jr.,

52

Chief Admin. Officer, Exec. VP and Chief Operating Officer of Africa $ 1.59M
Group

$0

History
The Coca Cola history extends back to 1885, when John Pemberton invented the original recipe for a
new cocawine. He named it Pemberton's French Wine Coca, which was believed to be inspired by
Vin Mariani, a popular cocawine invented by Angelo Mariani. Pemberton developed Coca-Cola, a
non-alcoholic version of his original cocawine, when Fulton County passed prohibition legislation.
Carbonated water was added later by accident when Pemberton was mixing drinks for a friend and
incidentally included it. His friends loved the new taste, so he altered the original formula to
incorporate it.
This made the first big break in Coca Cola history. Candler incorporated The Coca-Cola Company in
1982, and began marketing the product. The drink achieved the status of national icon for the USA by
its 50th anniversary. Bottles of Coca-Cola were sold starting in 1894, and cans in 1955. The first
bottle was sold in Vicksburg, Mississippi. In 1899, Chattanooga, Tennessee became the first site of a
Coca-Cola bottling company.

In Pemberton's original formula, he added five ounces of coca leaf (cocaine) per gallon of syrup.
Candler claimed that he altered the formula and only added a tenth of the amount. Coca Cola once
contained an estimate of nine milligrams of cocaine per glass. It wasn't until 1903 that it was removed
from the drink altogether, replacing it with coca flavoring.
"New Coke" came out in 1985 after Coca-Cola attempted to change the original formula. Most
consumers preferred the taste of the original Coca-Cola, and many ceased purchasing the product
until the company switched back to the original formula. It was renamed Coca Cola Classic to show
consumers that the drink had reverted back to its original formula.
By the 21st century, Coca Cola history took another leap in the market. In 2005, the company
launched "Diet Coke", sweetened with artificial flavors. Later in 2005, it announced "Coca Cola
Zero", sweetened with aspartame and acesulfame potassium. Since then, the company has produced
other products containing the same Coca-Cola formula with minor differences.
Coca Cola is now being sold around the world, in more than 200 different countries. The Coca-Cola
company now sponsors an assortment of events, including the "Olympic Games", and "NASCAR". In
England, it is the primary sponsor of "The Football League". It is also featured in several television
shows including "The Gods Must Be Crazy."
Coca Cola history has come a long way since Pemberton invented the original
recipe, and continues to grow by leaps and bounds. It is no surprise that it is one
of the leading soft drinks of the market.

COCA COLA ENTERPRISES INC Cash Flow


Annual Data | Quarterly Data
Period Ending

Q3
FY09

Q2 FY09 Q1 FY09

Q4 FY08

Q3
FY08

Income

247.00
M

313.00 M 61.00 M

-1.45 B

214.00
M

Depreciation, Depletion & Amortization

254.00
M

256.00 M 262.00 M

244.00 M

263.00
M

Depreciation & Depletion

254.00
M

256.00 262.00 M
M

244.00 M

263.00
M

Amortization of Intangible Assets

6.00 M

21.00
M

Extraordinary Items & Discontinued


Operations

Other Funds from Operations

Funds from Operations

242.00
M

235.00 305.00 M
M

257.00 M

265.00
M

Increase or Decrease in Accounts


Receivable

Increase or Decrease in Inventory

Increase or Decrease in Accounts

Q3
FY09

Period Ending
Income

247.00
M

Q3
FY08

Q2 FY09 Q1 FY09

Q4 FY08

313.00 M 61.00 M

-1.45 B

214.00
M

Payable & Accrued Liabilities


Increase or Decrease in Income Taxes
Payable

Increase or Decrease in Other Accruals

Other Assets and Liabilities - Net


Change

Funds from/for
Activities

-298.00 -372.00 M
M

-269.00 M

-399.00
M

107.00
M

-63.00 -67.00 M
M

-12.00 M

-134.00
M

to 190.00
M

233.00 207.00 M
M

202.00 M

180.00
M

Other

Operating -135.00
M

Net Cash Flow Operating Activities


Capital Expenditures
Fixed Assets)

(Additions

Disposal of Fixed Assets

1.00 M

3.00 M 17.00 M

4.00 M

2.00 M

Aquisitions

Increase in Investments

0.00

0.00

0.00

0.00

0.00

Decrease/Sale of Investments

0.00

0.00

0.00

0.00

0.00

Other Uses - Investing

Other Sources - Investing

1.00 M

0.00

0.00

0.00

0.00

Net Cash Flow - Investing

259.00
M

235.00 193.00 M
M

300.00 M

178.00
M

Net Proceeds from Sales/Issues of 0.00


Common & Preferred

14.00
M

11.00 M

8.00 M

11.00 M

Proceeds from Stock Options

14.00
M

11.00 M

6.00 M

11.00 M

Other Proceeds from Sale/Issues of 0.00


Stock

0.00

0.00

2.00 M

0.00

Purchase of Common & Preferred Stock 0.00

0.00

0.00

0.00

0.00

Cash Dividends Paid Total

34.00 M

34.00
M

29.00 M

28.00 M

19.00 M

Long Term Borrowings

772.00
M

104.00 618.00 M
M

474.00 M

724.00
M

Reduction in Long Term Debt

807.00
M

395.00 421.00 M
M

122.00 M

448.00
M

498.00 0.00
M

0.00

156.00
M

Increase/Decrease
Borrowings

in

Short

0.00

Term 0.00

Other Sources - Financing

0.00

1.00 M 6.00 M

0.00

0.00

Net Cash Flow - Financing

-69.00
M

188.00 185.00 M
M

332.00 M

268.00
M

Effect of Exchange Rate on Cash

-3.00 M

0.00

-1.00 M

-3.00 M

1.00 M

Q3
FY09

Period Ending
Income

247.00
M

Increase/Decrease in Cash and Short -224.00


Term Investments
M

Q3
FY08

Q2 FY09 Q1 FY09

Q4 FY08

313.00 M 61.00 M

-1.45 B

214.00
M

19.00 M

-47.00
M

FY2005

FY2004

-110.00 -74.00 M
M

Period Ending

FY2008

FY2007

FY2006

Net Income/Starting Line

-4.39 B

711.00 M -1.14 B

514.00 M

596.00
M

1.05 B

1.07 B

1.01 B

1.04 B

1.07 B

Operating Activities
Depreciation, Depletion & Amortization
Depreciation & Depletion

1.05 B

1.07 B 1.01 B

1.04 B

1.07 B

Amortization of Intangible Assets

75.00 M

124.00 M 169.00 M

255.00 M

331.00
M

Deferred Income Taxes and Investment Tax 76.00 M


credity

Deferred Income Taxes

76.00 M

124.00 169.00 M
M

255.00 M

331.00
M

Income Tax Credit

Other Cash Flow

7.62 B

-48.00 M

2.90 B

-75.00 M

-122.00
M

Funds from Operations

1.68 B

1.75 B

1.70 B

1.56 B

1.67 B

0.00

0.00

0.00

0.00

-93.00 M

-111.00 M

58.00 M

-51.00
M

Extraordinary
Operations

Items

&

Discontinued 0.00

Funds from/for Other Operating Activities

-57.00
M

Incline (Decline) in Receivables

-118.00
M

-42.00 -173.00 M
M

-30.00 M

-21.00
M

Incline (Decline) in Inventories

-24.00
M

-105.00 46.00 M
M

-48.00 M

-2.00 M

Incline (Decline) in Accounts Payable

135.00
M

211.00 -19.00 M
M

264.00 M

57.00 M

Incline (Decline) in Income Taxes


Payable

Incline (Decline) in Other Accruals

-128.00 M

-85.00
M

Incline (Decline) in Other Assets or -50.00


Liabilties
M
Net Cash Flow/Operating Activities

-157.00 35.00 M
M

1.62 B

1.66 B

1.59 B

1.62 B

1.62 B

Additions to Other Assets

0.00

0.00

0.00

0.00

0.00

Net Assets from Acquisitions

0.00

0.00

106.00 M

0.00

0.00

Capital Expenditures (Additions to Fixed


Assets)

Q3
FY09

Period Ending

Q2 FY09 Q1 FY09

Q4 FY08

Q3
FY08

Income

247.00
M

313.00 M 61.00 M

-1.45 B

214.00
M

Incline (Decline) in Inventories

0.00

0.00

0.00

0.00

0.00

Decrease in Investments

0.00

0.00

0.00

0.00

0.00

Disposal of Fixed Assets

18.00 M

68.00 M

50.00 M

48.00 M

24.00 M

Other Uses - Investing

12.00 M

4.00 M

14.00 M

0.00

0.00

Other Sources - Investing

0.00

0.00

0.00

0.00

0.00

Net Cash Flow - Investing

975.00
M

874.00 M 952.00 M

854.00 M

922.00
M

123.00 73.00 M
M

40.00 M

181.00
M

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

2.02 B

1.08 B

1.54 B

558.00
M

0.00

0.00

0.00

0.00

1.62 B

2.36 B

1.30 B

Proceeds from Stock Options

18.00 M

Other Proceeds from Sale/Issues of 0.00


Stock
Com/Pfd Purchase, Retired, Converted, 0.00
Redeemed
Financing Activities
Long Term Borrowings
Incline or
Borrowings

Decline

1.61 B
in

Short

Term 0.00

Reduction in Long Term Debt

1.62 B

2.83 B

Cash Dividends Paid Total

138.00
M

116.00 M 114.00 M

76.00 M

76.00 M

Common Dividends (Cash)

138.00
M

116.00 M 114.00 M

76.00 M

76.00 M

Preferred Dividends (Cash)

0.00

0.00

0.00

0.00

0.00

Other Sources - Financing

3.00 M

11.00 M

4.00 M

46.00 M

0.00

Other Uses - Financing

3.00 M

11.00 M

4.00 M

46.00 M

0.00

Net Cash Flow - Financing

-126.00
M

-799.00 M -571.00 M

-804.00 M

-632.00
M

Effect of Exchange rate on Cash

-18.00
M

4.00 M

-9.00 M

14.00 M

COCA COLA ENTERPRISES INC Average Monthly Returns

10.00 M

Some investors consider seasonal performance when purchasing or selling stocks. This chart
illustrates the average monthly return for the past 5 years. Users often also consider the number of
times a stock increases or decreases for any given month. Mouse-over the chart to view 5 years of
history for each month.
Seasonal Performance Data: CCE
Returns
Jan
Feb Mar Apr May Jun
Jul
Aug Sep
Oct
Nov Dec
Avg.

-1.85

0.57 2.90

5.12

0.41

-1.43 3.45

2.51 -2.69 -10.30 -0.20 6.23

#Times CCE 48
Stock Price
Increased

47 57

51

59

45

53

53

48

53

52

48

#Times CCE 1
Stock Price
Unchanged

#Times CCE 52
Stock Price
Decreased

48 50

51

45

58

49

56

52

55

48

55

2009 %

-6.64

2.23 14.90 29.34 -2.33 -0.05 12.85 7.56 5.94

2008 %

11.36

5.90 -0.87 -7.07 -10.48 -14.09 -2.13 0.83 -1.75 -40.06 -8.65 31.05

2007 %

0.49

0.85
2.13

8.35

6.43

2.78

-5.57 5.12 1.68

2006 %

2.97

3.51
0.45

-3.97 0.67

3.61

5.35

2005 %

5.28

-3.88 -1.06 7.78


2.72

0.59

2004 %

Returns %

PRICES

-10.92 3.04

0.62

0.23

3.91 -6.58 -3.83

2.10

-0.14

6.77

-4.88 -12.74 -3.27

1.91

-0.25

0.24

6.56

Date

Open

High

Low

Close

Volume

Adj Close*

4-Dec-09

20.18

20.18

19.74

19.91

3,430,200

19.91

3-Dec-09

19.95

20.10

19.84

19.86

3,473,100

19.86

2-Dec-09

19.78

20.02

19.72

19.97

3,016,300

19.97

1-Dec-09

19.78

19.95

19.73

19.75

3,605,800

19.75

30-Nov-09

19.91

19.98

19.59

19.65

5,927,600

19.65

27-Nov-09

19.98

20.00

19.72

19.93

1,291,400

19.93

25-Nov-09

20.32

20.44

20.18

20.37

2,238,500

20.37

24-Nov-09

20.40

20.60

20.12

20.30

3,577,400

20.30

24-Nov-09

$ 0.08 Dividend

23-Nov-09

20.57

20.74

20.50

20.60

2,314,400

20.52

20-Nov-09

20.17

20.49

20.12

20.42

2,779,000

20.34

19-Nov-09

20.51

20.60

20.15

20.23

3,153,300

20.15

18-Nov-09

20.67

20.75

20.46

20.62

3,366,800

20.54

17-Nov-09

20.54

20.79

20.50

20.73

2,504,800

20.65

16-Nov-09

20.27

20.67

20.23

20.64

4,489,000

20.56

13-Nov-09

20.18

20.37

20.00

20.23

3,474,500

20.15

12-Nov-09

20.29

20.47

20.11

20.14

3,220,500

20.06

11-Nov-09

20.09

20.29

19.97

20.27

3,458,000

20.19

10-Nov-09

19.79

20.09

19.62

20.03

3,429,000

19.95

9-Nov-09

19.84

20.12

19.77

20.10

2,973,900

20.02

6-Nov-09

19.60

19.73

19.49

19.72

3,231,500

19.64

5-Nov-09

19.11

19.87

19.11

19.72

7,675,000

19.64

4-Nov-09

19.04

19.36

18.93

19.11

5,034,900

19.04

3-Nov-09

18.88

19.00

18.85

18.99

5,151,700

18.92

2-Nov-09

19.12

19.23

18.75

18.94

6,168,400

18.87

30-Oct-09

19.42

19.48

18.97

19.07

7,210,100

19.00

29-Oct-09

19.10

19.78

19.08

19.60

10,382,400

19.52

28-Oct-09

20.14

20.30

18.94

19.02

8,666,100

18.95

27-Oct-09

19.84

20.21

19.74

20.02

5,150,600

19.94

26-Oct-09

19.94

20.34

19.87

19.94

4,289,800

19.86

23-Oct-09

20.65

20.65

19.90

19.98

3,740,500

19.90

22-Oct-09

20.62

20.65

20.17

20.55

2,659,200

20.47

21-Oct-09

20.55

20.89

20.45

20.54

3,005,800

20.46

20-Oct-09

21.08

21.11

20.45

20.54

3,148,900

20.46

19-Oct-09

20.95

21.25

20.86

21.13

3,800,700

21.05

16-Oct-09

21.04

21.05

20.83

20.94

2,535,100

20.86

15-Oct-09

20.94

21.13

20.89

21.11

2,577,300

21.03

14-Oct-09

21.00

21.11

20.74

21.05

3,047,400

20.97

13-Oct-09

20.89

21.01

20.54

20.92

3,717,700

20.84

12-Oct-09

20.91

21.19

20.84

20.91

2,202,700

20.83

9-Oct-09

20.79

20.98

20.74

20.94

2,096,000

20.86

8-Oct-09

20.98

21.06

20.72

20.85

2,825,100

20.77

7-Oct-09

20.97

21.00

20.71

20.93

2,529,600

20.85

6-Oct-09

21.00

21.11

20.76

20.95

3,373,300

20.87

5-Oct-09

20.56

20.96

20.39

20.96

3,507,200

20.88

2-Oct-09

20.27

20.64

20.07

20.58

3,896,300

20.50

1-Oct-09

21.22

21.23

20.53

20.56

5,159,100

20.48

30-Sep-09

20.98

21.44

20.72

21.41

4,954,800

21.33

29-Sep-09

21.07

21.15

20.93

21.03

2,439,000

20.95

28-Sep-09

20.92

21.16

20.83

21.02

2,258,400

20.94

25-Sep-09

21.00

21.13

20.86

20.90

1,981,800

20.82

24-Sep-09

21.14

21.25

20.85

21.01

2,772,600

20.93

23-Sep-09

21.02

21.42

21.02

21.11

4,214,200

21.03

22-Sep-09

21.03

21.08

20.79

20.94

2,747,900

20.86

21-Sep-09

21.10

21.15

20.87

20.97

4,250,300

20.89

18-Sep-09

21.12

21.17

20.85

21.15

4,861,500

21.07

17-Sep-09

21.14

21.14

20.76

20.99

4,785,000

20.91

16-Sep-09

20.90

20.90

20.31

20.76

3,932,100

20.68

15-Sep-09

20.71

20.89

20.53

20.87

3,186,700

20.79

14-Sep-09

20.33

20.76

20.18

20.75

3,813,400

20.67

11-Sep-09

20.43

20.52

20.22

20.45

2,822,800

20.37

10-Sep-09

20.12

20.38

20.00

20.37

5,223,600

20.29

9-Sep-09

20.49

20.49

19.83

20.10

5,783,700

20.02

9-Sep-09

$ 0.08 Dividend

8-Sep-09

20.38

20.51

20.29

20.50

4,232,400

20.34

4-Sep-09

20.26

20.47

20.15

20.32

2,756,800

20.16

3-Sep-09

20.15

20.32

19.92

20.30

2,937,400

20.14

2-Sep-09

19.87

20.14

19.75

20.04

4,132,300

19.88

Coca-Cola: Dividend Stock Analysis

Coca-Cola has paid uninterrupted dividends on its common stock since 1893 and increased payments
to common shareholders every year for 47 years.
From the end of 1998 up until December 2008 this dividend growth stock has delivered a negative
annual average total return of 2.10% to its shareholders. The stock has largely traded between $65 and
$40 over the past decade.

The company has managed to deliver a 10.90% average annual increase in its EPS between 1999 and
2008. Analysts are expecting an increase in EPS to $3.05-$3.10 for 2009 and $3.25-$3.30 by 2010.
This would be a nice increase from the 2008 earnings per share of $2.49. Future drivers for earnings
could be the companys tea, coffee and water operations. Cost savings initiatives could also add to the
bottom line over time.

Some analysts believe that Coca Cola could follow arch rival Pepsi Cos (PEP) moves to acquire its
own bottlers in an effort to gain more control over the production and distribution of its beverages in
key markets. Coke holds a 35% interest in its largest manufacturer and distributor of Coca Cola
products, Coca-Cola Enterprises In. (CCE). Coca-Cola Enterprises Inc. accounts for about 40% of
Cokes concentrate sales and 16% of the companys worldwide volume, which makes it a likely target
of acquisition, should Coca Cola decide to follow Pepsi Cos strategy of buying back its bottling
operations.
The Return on Equity has been in a decline after hitting a high in 2001. Rather than focus on absolute

values for this indicator, I generally want to see at least a stable return on equity over time.

Annual dividends have increased by an average of 10.10% annually since 1999, which is slightly
lower than the growth in EPS. The company last raised its dividend by 8% in February 2009, for the
47th year in a row.

A 10 % growth in dividends translates into the dividend payment doubling every seven years. If we
look at historical data, going as far back as 1969, The Coca Cola Company has indeed managed to
double
its
dividend
payment
every
seven
years
on
average.
The dividend payout ratio remained above 50% for the majority of the past decade. A lower payout is
always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-

term

fluctuations

in

earnings.

Currently Coca Cola is trading at 20 times earnings and yields 3.30%. In comparison arch rival in the
cola wars Pepsi Co trades at a P/E multiple of 16.5 and yields 3.40%. Check my analysis of Pepsi Co.
I believe that The Coca Cola Company is not as attractively valued at the moment as Pepsi Co. I
would consider adding to my position there if it can cover its dividends at least two times by its
earnings by the end of the year, and if the P/E ratio doesnt increase above 20.
COCA COLA ENTERPRISES INC Dividends & Splits
5 Year Dividend History
Payable
Amount/Share

Ex-Date

Record

Declaration

12/10/2009

$0.08

11/24/2009

11/27/2009

10/28/2009

09/24/2009

$0.08

09/09/2009

09/11/2009

07/30/2009

06/25/2009

$0.07

06/10/2009

06/12/2009

04/22/2009

03/26/2009

$0.07

03/11/2009

03/13/2009

02/11/2009

12/11/2008

$0.07

11/25/2008

11/28/2008

10/23/2008

09/25/2008

$0.07

09/10/2008

09/12/2008

07/23/2008

06/26/2008

$0.07

06/11/2008

06/13/2008

04/23/2008

03/27/2008

$0.07

03/12/2008

03/14/2008

02/15/2008

12/13/2007

$0.06

11/28/2007

11/30/2007

10/25/2007

09/27/2007

$0.06

09/12/2007

09/14/2007

07/24/2007

06/28/2007

$0.06

06/13/2007

06/15/2007

04/25/2007

03/29/2007

$0.06

03/14/2007

03/16/2007

02/10/2007

12/14/2006

$0.06

11/29/2006

12/01/2006

10/26/2006

09/28/2006

$0.06

09/13/2006

09/15/2006

07/26/2006

06/29/2006

$0.06

06/14/2006

06/16/2006

04/26/2006

03/30/2006

$0.06

03/15/2006

03/17/2006

02/18/2006

12/15/2005

$0.04

11/30/2005

12/02/2005

10/26/2005

10/03/2005

$0.04

09/15/2005

09/19/2005

07/27/2005

07/01/2005

$0.04

06/15/2005

06/17/2005

04/27/2005

Payable

Amount/Share

Ex-Date

Record

Declaration

04/01/2005

$0.04

03/16/2005

03/18/2005

02/16/2005

Dividend Analysis
Looking at the last 5 years of dividends, I have calculated an average high
dividend yield of 1.97%. However, that seems a tad low considering that each of
the last 2 years is significantly higher than that amount. If I average out just the
last 4 years of high dividend yields, I come up with 2.73%. Still lower than the
average high yield of the last 2 years.
And now the dividend payout ratio. Ah ha! This explains how they were able to
increase dividends at 10% even when the fundamentals have not been growing
as quickly. Look at the increase in the payout ratio. It has grown from a low of
34.15% in 1997 to a high of 57.14% in 2006! It has just been a steady climb up
for the last 10 years.
Using the 2.73% as an average high dividend yield, I calculate a price of $49.82
to be able to collect this average high dividend yield. At close of Friday, the
current price was $52.80. That means a premium of 5.99% over the price I am
willing to pay.
Conclusion:
Well, my analysis shows that Coca-Cola fundamentals have not been keeping up
with their very healthy dividend growth. This has caused Coca-Cola to have to
payout more and more of its earnings to shareholders. This concerns me
because eventually, they will not be able to raise their dividend at these high
rates because their dividend payout ratio will be too high.
I am sure that Warren Buffett is earning a healthy dividend on his KO stocks, but
personally, I would pass on this one today. There are stocks out there that
continue to grow their fundamentals which will in turn allow them to grow their
dividends.

COCA COLA ENTERPRISES INC Top Competitors

Sym
bol
Company Name

Chang %
Volum
Chart
Last e
Change e
Newss

CCE

COCA COLA ENTERPRISES INC 19.86 -0.11

-0.55

3.47 M

PBG

PEPSI BOTTLING GROUP INC

38.19 -0.28

-0.73

3.10 M

PEP

PEPSICO INC

62.76 -0.89

-1.40

6.40 M

Pepsi

Pepsi
Type

Cola

Manufacturer

PepsiCo.

Country of origin

United States

Introduced

1898
June
16,
1961 (as Pepsi)

Related products

Coca-Cola
Fanta
Dr
Sprite
Irn
Cola
Big Cola

(as
1903

Brad's
(as

(soft

Drink)
Pepsi-Cola)

Pepper
drink)
Bru
Turka

History
Pepsi is a carbonated soft drink produced and manufactured by PepsiCo. It is sold in many places
such as retail stores, restaurants, schools, cinemas and from vending machines. The drink was first
made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was
trademarked on June 16, 1903. There have been many Pepsi variants produced over the years since
1898.
In October 2008, Pepsi announced that it would be redesigning its logo and re-branding many of its
products by early 2009. In 2009, Pepsi, Diet Pepsi and Pepsi Max began using all lower-case fonts for
name brands, and Diet Pepsi Max was re-branded as Pepsi Max. The brand's blue and red globe
trademark became a series of "smiles," with the central white band arcing at different angles
depending on the product. Pepsi in countries such as the U.S., Canada, Brazil, Bolivia, Guatemala,
Nicaragua, Honduras, El Salvador, Colombia, Argentina, Puerto Rico and Australia is carrying the
"smile" logo, while the rest of the countries continue to use the old design on all packaging.
In mid-September 2009,the new logo has started to appear on 300 and 600ml bottles of Pepsi in
Australia. Pepsi Max bottles still carry the current logo as of 27th September.
Large Block Holder Type

Number

Institutions

1,764

Mutual Fund

2,759

Other Major

25

Total Number
Block Holders

of

Large 4,548

Total Number of Shares Held


1.56 B
% of Shares Owned by all Large Block Holders
100.00%

PEPSICO INC Dividends & Splits


Upcoming Dividends
Payable
Amount/Share Ex-Date
01/04/10
$0.45
12/02/09
5 Year Dividend History
Payable
Amount/Share Ex-Date

Record

Declaration

12/04/09

11/13/09

Set Alert

Record

Declaration

01/04/2010 $0.45

12/02/2009

12/04/2009

11/16/2009

09/30/2009 $0.45

09/02/2009

09/04/2009

08/13/2009

06/30/2009 $0.45

06/03/2009

06/05/2009

05/06/2009

03/31/2009 $0.425

03/04/2009

03/06/2009

02/07/2009

01/02/2009 $0.425

12/03/2008

12/05/2008

11/17/2008

09/30/2008 $0.425

09/03/2008

09/05/2008

07/19/2008

06/30/2008 $0.425

06/04/2008

06/06/2008

05/08/2008

03/31/2008 $0.375

03/05/2008

03/07/2008

02/02/2008

01/02/2008 $0.375

12/05/2007

12/07/2007

11/17/2007

09/28/2007 $0.375

09/05/2007

09/07/2007

07/20/2007

06/29/2007 $0.375

06/06/2007

06/08/2007

05/09/2007

03/30/2007 $0.30

03/07/2007

03/09/2007

02/03/2007

01/02/2007 $0.30

12/06/2006

12/08/2006

11/18/2006

09/29/2006 $0.30

09/06/2006

09/08/2006

07/22/2006

06/30/2006 $0.30

06/07/2006

06/09/2006

05/04/2006

03/31/2006 $0.26

03/08/2006

03/10/2006

02/04/2006

01/03/2006 $0.26

12/07/2005

12/09/2005

11/19/2005

09/30/2005 $0.26

09/07/2005

09/09/2005

07/23/2005

06/30/2005 $0.26

06/08/2005

06/10/2005

05/05/2005

03/31/2005 $0.23

03/09/2005

03/11/2005

01/28/2005

PEPSICO INC Income Statement


View:
Annual Data | Quarterly Data
Period Ending

Q3
FY09

Q2 FY09

Q1 FY09

Q4 FY08

Net Sales/Revenues

11.08 B

10.59 B

8.26 B

12.73 B

11.24 B

Cost of Goods Sold (Excluding 4.76 B


Depreciation)

4.52 B

3.44 B

6.17 B

4.90 B

Depreciation,
Amortization

371.00 M 314.00 M

21.00 M

377.00 M

5.90 B

5.70 B

4.51 B

6.54 B

5.96 B

Selling, General & Admin Expenses 3.65 B

3.50 B

2.90 B

5.32 B

3.98 B

Other Operating Expense

1.61 B

1.44 B

1.52 B

1.42 B

Depletion

Gross Income

and 422.00
M

1.57 B

Q3 FY08

Period Ending

Q3
FY09

Q2 FY09

Q1 FY09

Q4 FY08

Net Sales/Revenues

11.08 B

10.59 B

8.26 B

12.73 B

11.24 B

Operating Income

2.23 B

2.20 B

1.61 B

1.21 B

1.98 B

Extraordinary Credit - Pretax

93.00 M

0.00

0.00

0.00

0.00

Extraordinary Charge - Pretax

0.00

209.00 M 91.00 M

908.00 M

176.00 M

Pretax Equity in Earnings

0.00

0.00

0.00

0.00

Other Income/Expenses - Net

16.00 M

424.00 M 2.00 M

908.00 M

192.00 M

Pretax Income

2.16 B

2.12 B

1.08 B

1.92 B

Income Taxes

575.00
M

568.00 M 374.00 M

293.00 M

550.00 M

Minority Interest

16.00 M

8.00 M

6.00 M

0.00

0.00

Equity in Earnings

0.00

0.00

0.00

0.00

0.00

Discontinued Operations

0.00

0.00

0.00

0.00

0.00

1.66 B

1.14 B

719.00 M

1.58 B

Extra Items & Gain (Loss) Sale of 0.00


Assets

0.00

0.00

0.00

0.00

Net Income
Dividends

1.66 B

1.14 B

719.00 M

1.58 B

1.00 M

3.00 M

0.00

2.00 M

Net Income Used to Calculate


Diluted EPS

Net Income Used to Calculate Basic


EPS

Net Income Available to Common

1.72 B

1.66 B

1.14 B

719.00 M

1.57 B

Period Ending

FY2008

FY2007

FY2006

FY2005

Net Sales/Revenues

43.25 B

39.47 B

35.14 B

32.56 B

29.26 B

Cost of Goods Sold (Excluding 18.78 B


Depreciation)

16.67 B

14.52 B

13.02 B

12.29 B

Depreciation,
Amortization

1.43 B

1.41 B

1.31 B

1.26 B

19.21 B

18.24 B

15.71 B

14.11 B

12.77 B

12.31 B

10.30 B

Net
Income
Before
Items/Preferred Div

Before

Extra 1.72 B

Preferred 1.72 B

Preferred Dividend Requirements

Depletion

and 1.54 B

Gross Income
Selling, General
Expenses

0.00

22.92 B
&

Admin 15.45 B

21.38 B

0.00

1.49 B

Q3 FY08

FY2004

Other Operating Expense

0.00

0.00

0.00

0.00

0.00

Operating Expenses - Total

1.57 B

1.61 B

1.44 B

1.52 B

1.42 B

Operating Income

7.48 B

7.27 B

6.44 B

5.92 B

5.41 B

Extraordinary Credit - Pretax

0.00

0.00

0.00

0.00

0.00

Period Ending

Q3
FY09

Q2 FY09

Q1 FY09

Q4 FY08

Net Sales/Revenues

11.08 B

10.59 B

8.26 B

12.73 B

11.24 B

Q3 FY08

Extraordinary Charge - Pretax

543.00
M

102.00 M 150.00 M

206.00 M

Non-operating Interest Income

41.00 M

125.00 M 173.00 M

159.00 M

74.00 M

Reserves Inc (Dec)

0.00

0.00

0.00

0.00

0.00

Pretax Equity in Earnings

0.00

0.00

0.00

0.00

0.00

Other Income/Expenses - Net

0.00

0.00

0.00

0.00

0.00

6.61 B

6.08 B

5.33 B

Earnings Before Interest & Taxes 6.98 B


(EBIT)

7.30 B

Interest Expenses On Debt

343.00
M

245.00 M 255.00 M

261.00 M

169.00 M

Interest Capitalized

14.00 M

21.00 M 16.00 M

5.00 M

2.00 M

Pretax Income

6.65 B

7.07 B

6.37 B

5.82 B

5.17 B

Income Taxes

1.88 B

1.97 B

1.35 B

2.30 B

1.37 B

Current Domestic Income Tax

902.00
M

1.53 B 832.00 M

1.76 B

1.10 B

Current Foreign Income Tax

732.00
M

489.00 569.00 M
M

426.00 M

256.00 M

Deferred Domestic Income Tax

314.00
M

24.00 M -38.00 M

148.00 M

12.00 M

Deferred Foreign Income Tax

-69.00
M

-66.00 -16.00 M
M

-26.00 M

5.00 M

Income Tax Credits

0.00

0.00

0.00

Minority Interest

0.00

0.00

Equity in Earnings

374.00
M

560.00 M 616.00 M

557.00 M

380.00 M

After Tax Income Expense

0.00

0.00

0.00

0.00

0.00

Discontinued Operations

0.00

0.00

0.00

0.00

38.00 M

5.64 B

4.08 B

4.21 B

0.00

0.00

0.00

5.64 B

4.08 B

4.21 B

18.00 M

25.00 M

4.08 B

4.21 B

Net
Income
Before
Items/Preferred Div

Extra 5.14 B

Extra Items & Gain (Loss) Sale of 0.00


Assets
Net Income
Dividends

Before

Preferred 5.14 B

Preferred Dividend Requirements


Net Income Available to Common

10.00 M
5.14 B

5.66 B
0.00
5.66 B

12.00 M 11.00 M
5.66 B

5.64 B

Seasonal Performance Data: PEP


Returns
Jan
Feb Mar Apr May Jun Jul Aug Sep Oct
Nov Dec
Avg.
-2.89 -0.33 1.54 0.24 2.52 -2.24 3.16 2.00 3.73 -2.93 0.95 0.06
Returns %
#Times PEP Stock Price 49
45 56 51 54 46 57 58 58 52
54 50

Returns
Jan
Increased
#Times PEP Stock Price
0
Unchanged
#Times PEP Stock Price
52
Decreased
2009 %
-8.28
2008 %
-10.15
2007 %
4.30
2006 %
-3.21
2005 %
2.87
2004 %

Feb Mar Apr May Jun

Jul

Aug Sep Oct

Nov Dec

51

52

52

50

61

47

53

44

59

47

54

-4.15
2.01
-3.19
3.38
0.30

6.94
3.86
0.65
-2.22
-1.53

-3.33
-5.14
3.98
0.78
4.92

4.60
-0.33
3.39
3.81
1.11

5.59
-6.89
-5.08
-0.68
-4.13

3.26
4.67
1.19
5.56
1.11

-0.13
2.88
3.67
3.00
0.59

3.51
4.07
7.69
-0.02
3.39

3.22
-20.00
0.63
-2.78
4.27

2.76
-0.53
4.69
-2.31
0.12

-3.39
-1.65
0.94
-0.19
4.59

PepsiCo (PEP) Dividend Stock Analysis


PepsiCo, Inc. manufactures, markets, and sells various snacks, carbonated and non-carbonated
beverages, and foods worldwide.PepsiCo is a major component of the S&P 500, Dow Industrials and
the Dividend Aristocrats Indexes. PepsiCo has been consistently increasing its dividends for 36
consecutive years. From the end of 1998 up until December 2008 this dividend growth stock has
delivered
a
4.70%
annual
average
total
return
to
its
shareholders.

At the same time company has managed to deliver a 9.90% average annual increase in its EPS since
1999.

The ROE has remained largely between 31% and 38%, with the exception of 2004, when it fell to as
low
as
22%.

Annual dividend payments have increased by an average of 13.50% annually since 1999, which is
much higher than the growth in EPS. Analysts are expecting slight increase in EPS for 2009
compared to 2008, given the sluggish state of North American economies. The strong US dollar could
potentially hurt sales, as over 44% of PepsiCos revenues are derived internationally.
A 13.50 % growth in dividends translates into the dividend payment doubling almost every five years.
Since 1978 PepsiCo has actually managed to double its dividend payment every six years on average.

The dividend payout has remained in a range between 31% and 42%. In 2008 the dividend payout
ratio has surged to 51%. A lower payout is always a plus, since it leaves room for consistent dividend
growth minimizing the impact of short-term fluctuations in earnings. The slow growth in earnings
could
put
future
dividend
increases
at
risk.

PepsiCo is currently attractively valued. The stock trades at a price/earnings multiple of 15, has an
adequately covered dividend payout and the current dividend yield at 3.50%, which is above the
minimum
threshold
that
I
have
set.

PepsiCo, Inc. (PepsiCo) is a global snack and beverage company. The Company manufactures,
markets and sells a range of salty, convenient, sweet and grain-based snacks, carbonated and noncarbonated
beverages
and
foods.

Symb
ol
Company Name

Chang %
Last e
Change VolumeNews Charts

PEP

PEPSICO INC

62.76 -0.89

-1.40

6.40 M

KO

COCA COLA CO

57.27 -0.69

-1.19

10.12 M

DPS

DR
PEPPER
GROUP INC

SNAPPLE26.71 -0.19

-0.71

1.41 M

KFT

KRAFT FOODS INC

26.42 -0.19

-0.71

6.76 M

Free Cash Flow Payout

1.
2.
3.
4.
5.

Debt To Total Capital


Key Metrics
Dividend Growth Rate
Years of Div. Growth
Rolling 4-yr Div. > 15%

PEP earned two Stars in this section for 2.) and 3.) above. PEP earned a Star as a result of its most
recent Debt to Total Capital being less than 45%. PEP earned a Star for having an acceptable score in
at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders
every year since 1952 and has increased its dividend payments for 37 consecutive years.
Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if
you could earn a better return in a much less risky money market account (MMA)? This section
compares the earning ability of this stock with a high yield MMA. Two items are considered in this
section, see page 2 of the linked PDF for a detailed description:
1. NPV MMA Diff.
2. Years to > MMA
PEP earned a Star in this section for its NPV MMA Diff. of the $796. This amount is in excess of the
$500 target I look for in a stock that has increased dividends as long as PEP has. If PEP grows its
dividend at 7.6% per year, it will take 4 years to equal a MMA yielding an estimated 20-year average
rate of 3.9%. PEP earned a check for the Key Metric Years to >MMA since its 4 years is less than
the 5 year target.
Other: PEP is a member of the S&P 500, a Dividend Aristocrat and a member of the Broad Dividend
Achievers Index. PEPs global market positions and stable end markets produce consistent and
strong cash flows. The company continues to find domestic and international growth opportunities.
Compared to it peers, PEPs product innovation strategy is considered trend-setting for the industry.

Though carbonated soft drinks remain the most popular beverage, PEP recognizes that noncarbonated soft drinks are a faster growing category. The company is focusing on the health and
wellness trends. It has eliminated trans fats from many of its snack foods, and is introducing good
foryou foods under the Quaker Oats brand. Risks include the highly competitive and very mature
nature of it products, also with more exposure to foreign markets, political and currency risks also
increase.
Conclusion: PEP did not earn any Stars in the Fair Value section, earned two Stars in the Dividend
Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of
three Stars. This quantitatively ranks PEP as a 3 Star-Hold.
Using my D4L-PreScreen.xls model, I determined the share price could increase to $65.62 before
PEPs NPV MMA Differential fell to the $500 that I like to see for a stock with 37 consecutive years
of dividend increases. At that price the stock would yield 2.70%.
Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate
the target $500 NPV MMA Differential, the calculated rate is 6.3%. This dividend growth rate is
lower than the the 7.6% used in this analysis, thus providing a margin of safety. PEP has a risk rating
of 1.00 which classifies it as a low risk stock.
Like its competition Coca-Cola (KO), PEPs Free Cash Flow Payout, currently at 70%, tends to
remain higher than the 60% level that I prefer. However, this is mitigated to an extent by relatively
low debt levels and predictable cash flows. PEP is a stock I will buy, as my allocation allows and
when it dips below its buy price of $55.10. For additional information, including the stocks dividend
history, please refer to its data page.
Stock price of last five years with monthly price list

PRICES

Date

Open

High

Low

Close

Volume

Adj Close*

4-Dec-09

63.18

64.00

63.08

63.85

8,907,000

63.85

3-Dec-09

63.58

63.59

62.67

62.76

6,406,200

62.76

2-Dec-09

63.50

63.74

63.17

63.65

6,195,800

63.65

2-Dec-09

$ 0.45 Dividend

1-Dec-09

62.68

63.93

62.49

63.87

6,887,700

63.42

30-Nov-09

62.64

62.83

62.15

62.22

7,252,700

61.78

27-Nov-09

62.24

62.55

61.75

62.30

3,416,000

61.86

25-Nov-09

62.53

63.27

62.49

63.19

4,672,600

62.74

24-Nov-09

62.62

62.65

62.13

62.50

4,139,700

62.06

23-Nov-09

62.46

62.99

62.26

62.49

5,009,400

62.05

20-Nov-09

61.67

62.31

61.43

62.08

5,314,600

61.64

19-Nov-09

62.10

62.10

61.35

61.88

4,390,400

61.44

18-Nov-09

62.44

62.51

61.81

62.30

3,952,300

61.86

17-Nov-09

62.42

62.63

62.03

62.60

4,362,400

62.16

16-Nov-09

62.21

62.49

61.94

62.43

4,966,800

61.99

13-Nov-09

61.63

62.13

61.35

61.94

6,411,100

61.50

12-Nov-09

62.49

62.75

61.10

61.27

8,474,900

60.84

11-Nov-09

62.34

62.68

62.08

62.60

4,714,300

62.16

10-Nov-09

62.17

62.94

61.93

62.08

7,094,100

61.64

9-Nov-09

61.81

62.32

61.43

62.28

6,921,800

61.84

6-Nov-09

60.99

61.76

60.79

61.76

4,831,000

61.32

5-Nov-09

60.44

61.41

60.42

61.23

5,578,500

60.80

4-Nov-09

60.16

60.96

59.79

60.38

5,552,100

59.95

3-Nov-09

60.29

60.39

59.62

60.06

5,797,000

59.64

2-Nov-09

60.79

61.07

60.16

60.60

6,618,800

60.17

30-Oct-09

61.35

61.64

60.37

60.55

7,794,100

60.12

29-Oct-09

61.01

61.46

60.57

61.39

5,245,300

60.96

28-Oct-09

60.88

61.52

60.75

60.99

6,321,900

60.56

27-Oct-09

60.64

61.35

60.10

61.00

7,262,900

60.57

26-Oct-09

61.14

61.50

60.21

60.47

5,113,000

60.04

23-Oct-09

61.41

61.67

60.58

61.03

6,505,200

60.60

22-Oct-09

61.90

61.90

60.87

61.50

5,428,100

61.07

21-Oct-09

61.38

62.34

61.23

61.84

7,445,000

61.40

20-Oct-09

62.00

62.05

61.12

61.58

8,068,000

61.15

19-Oct-09

62.28

62.57

61.90

62.05

5,557,300

61.61

16-Oct-09

62.47

62.68

62.11

62.29

6,588,400

61.85

15-Oct-09

61.57

62.75

61.39

62.68

10,518,600

62.24

14-Oct-09

60.94

61.68

60.70

61.62

8,462,200

61.19

13-Oct-09

60.88

61.00

60.52

60.60

7,502,000

60.17

12-Oct-09

60.43

61.36

60.25

60.92

6,178,100

60.49

9-Oct-09

60.38

60.70

59.81

60.59

6,360,200

60.16

8-Oct-09

61.24

61.24

59.80

60.39

17,263,400

59.96

7-Oct-09

60.85

61.38

60.45

61.17

6,441,900

60.74

6-Oct-09

61.05

61.27

60.42

60.87

8,128,900

60.44

5-Oct-09

60.83

61.24

60.14

60.85

7,892,000

60.42

2-Oct-09

59.12

61.24

58.93

60.90

17,530,200

60.47

1-Oct-09

58.70

58.99

58.27

58.46

9,010,200

58.05

30-Sep-09

58.74

58.86

58.01

58.66

8,898,400

58.25

29-Sep-09

59.10

59.31

58.00

58.51

7,086,400

58.10

28-Sep-09

58.95

59.49

58.62

59.03

4,085,900

58.61

25-Sep-09

58.50

59.13

58.32

58.68

6,758,800

58.27

References:
1. http://www.coca-cola.com/index.jsp
2. http://finance.aol.com/quotes/the-coca-cola-company/ko/nys
3. http://finance.aol.com/event/the-pepsi-bottling-group-inc/pbg/nys
4. http://finance.yahoo.com/q?s=ko
5. http://www.dividendgrowthinvestor.com/2009/06/coca-cola-ko-dividendstock-analysis.html
6. http://finance.yahoo.com/q?s=ko
7. http://moneycentral.msn.com/detail/stock_quote?Symbol=Ko