PepsiCo (NasdaqGS:PEP) 2026 Conference February 18, 2026 09:00 AM ET Company ParticipantsBonnie Herzog - Member of the Board of DirectorsKevin Grundy - Managing DirectorRamon Laguarta - Chairman and CEOSteve Schmitt - EVP and CFOConference Call ParticipantsAndrea Teixeira - Managing Director and Senior Equity Research AnalystDara Mohsenian - Managing Director and Senior Equity AnalystMichael Lavery - Managing Director and Senior Research AnalystBonnie HerzogGood morning, everyone. It's a pleasure to welcome ...

HUNGRY & THIRSTY FOR GROWTH Ramon Laguarta Chairman & CEO Steve Schmitt CFO 2026 SAFE HARBOR STATEMENT & NON-GAAP INFORMATION Safe Harbor Statement Statements in this communication that are "forward - looking statements," including our guidance and long - term targets, are based on currently available information, operating plans and projections about future events and trends. Terminology such as "aim," "anticipate," "believe," "drive," "estimate, " "expect," "expressed confidence," "forecast," "future," "g ...

Quick Read PepsiCo (PEP) hiked its quarterly dividend distributions by 5% last year and is likely due for another dividend raise. Lowe’s (LOW) has a steady record of product sales and hiked its dividend by 4.3% in 2025. Emerson Electric (EMR) grew its net sales to $18.106 billion in fiscal 2025 and currently offers a respectable 1.46% dividend yield. A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here. ...

Core Insights - PepsiCo Inc.'s international business is a key growth driver, generating $38 billion in revenues in 2025, accounting for over 40% of total net revenues and core segment operating profit [1][9] - The international segment achieved 4.5% organic revenue growth in 2025, with consistent performance across food and beverage categories [2][4] Financial Performance - The international segment recorded its 19th consecutive quarter of mid-single-digit organic revenue growth, alongside a 27% growth in core operating profit and a 225 basis points margin expansion in Q4 2025 [2][9] - PepsiCo's shares have increased by 15.7% year-to-date, outperforming the industry growth of 13.3% [8] Geographic Diversification - Growth is geographically diversified, with strong performance in markets such as Mexico, Brazil, Argentina, India, Germany, Egypt, and Thailand for food, and Mexico, the U.K., Spain, Poland, Pakistan, and Australia for beverages [3][4] Strategic Initiatives - Management anticipates a "long runway for profitable growth" driven by localized innovation, expanded distribution in developing markets, and increased participation in energy and functional categories [4] - The company is well-positioned for further scaling due to resilient demand, margin expansion, and sustained share gains in international markets [4] Valuation and Earnings Estimates - PepsiCo trades at a forward price-to-earnings ratio of 19.11X, compared to the industry average of 20.08X [10] - The Zacks Consensus Estimate for PepsiCo's earnings per share implies year-over-year growth of 5.4% and 6.7% for 2026 and 2027, respectively [11]

Core Viewpoint - The Invesco Food & Beverage ETF (PBJ) and the First Trust Nasdaq Food & Beverage ETF (FTXG) provide exposure to the U.S. food and beverage industry, with differences in risk, income potential, and trading characteristics that may influence investor decisions [1] Cost & Size - PBJ has an expense ratio of 0.61% and FTXG has a slightly lower expense ratio of 0.60% - As of February 14, 2026, PBJ has a 1-year return of 7.50% while FTXG has a return of 6.87% - The dividend yield for PBJ is 1.62% compared to FTXG's 2.60% - PBJ has a beta of 0.55 indicating higher volatility compared to FTXG's beta of 0.42 - Assets Under Management (AUM) for PBJ is $103.9 million while FTXG has $20.10 million [2] Performance & Risk Comparison - Over the past five years, PBJ experienced a maximum drawdown of -15.84% while FTXG had a larger drawdown of -21.71% - An investment of $1,000 in PBJ would have grown to $1,296 over five years, whereas the same investment in FTXG would have grown to $925 [4] Holdings Composition - FTXG tracks a smart beta index with 31 holdings, including major positions in PepsiCo, Archer-Daniels-Midland, and Mondelez International - PBJ also holds 31 stocks, with top holdings in Hershey, PepsiCo, and Sysco [5] Investment Implications - For long-term investments, PBJ has shown a 31% return over the last five years, while FTXG has decreased by 6.94% during the same period - Despite FTXG's higher dividend yield, PBJ offers a higher quarterly dividend payout due to its higher fund price [7] - The choice of top holdings may influence investor preference, with FTXG's leading asset being PepsiCo and PBJ's being Hershey [8] - Both ETFs can serve as valuable portfolio additions during economic downturns, as they consist of consumer defensive stocks that provide essential goods [9]

Core Viewpoint - PepsiCo is recognized as an elite dividend stock, having extended its dividend growth streak to 54 consecutive years, making it a member of the Dividend Kings group, which signifies companies that have increased their dividends for at least 50 years [2][11] Dividend Growth - PepsiCo's dividend yield is currently around 3.5%, significantly higher than the S&P 500's yield of 1.2%, making it an attractive option for passive income [2] - The company announced a 5% increase in its March dividend payment compared to the previous year and a 4% increase for the June payment, marking its 54th consecutive annual dividend increase [4] Financial Health - In the previous year, PepsiCo generated approximately $12.1 billion in operating cash flow, which comfortably covered its capital expenditures of $4.4 billion and dividend payments of $7.6 billion [5] - The company ended the year with about $9.5 billion in cash on its balance sheet, supporting its strong A+ credit rating [5] Future Cash Returns - PepsiCo anticipates returning $7.9 billion in dividends to investors in 2026, alongside a planned stock repurchase of $1 billion as part of a $10 billion repurchase program through early 2030 [7] Revenue and Earnings Growth - The company expects net revenue growth of 4% to 6% and organic revenue growth of 2% to 4% in 2026, which will support core earnings-per-share growth of 4% to 6% on a constant-current basis [8] - PepsiCo aims for long-term annual organic revenue growth of 4% to 6% and high single-digit earnings-per-share growth on a constant currency basis [9] Strategic Investments - The company is investing nearly 5% of its net revenue in 2026 to support growth, focusing on high-growth areas [9] - PepsiCo made strategic acquisitions, including the purchase of Poppi for $1.7 billion and increasing its stake in Celsius to 11% through a $585 million acquisition of convertible preferred stock [10]

Core Viewpoint - The article emphasizes the importance of dividend investing in quality blue-chip stocks, Business Development Companies (BDCs), and Real Estate Investment Trusts (REITs) as a strategy for building wealth and achieving financial independence. Group 1: Investment Strategy - The company focuses on a buy-and-hold investment strategy, prioritizing quality over quantity in its portfolio selection [1]. - The aim is to supplement retirement income through dividends within the next 5-7 years [1]. Group 2: Target Audience - The company aspires to assist hard-working lower and middle-class workers in building investment portfolios comprised of high-quality, dividend-paying companies [1]. - The goal is to provide a new perspective to help these investors reach financial independence [1].

Core Viewpoint - The article emphasizes the importance of dividend investing in quality blue-chip stocks, Business Development Companies (BDCs), and Real Estate Investment Trusts (REITs) for building a sustainable retirement income stream. Group 1: Investment Strategy - The company focuses on a buy-and-hold investment strategy, prioritizing quality over quantity in its portfolio selection [1]. - The aim is to help lower and middle-class workers build investment portfolios that consist of high-quality, dividend-paying companies [1]. Group 2: Personal Background - The analyst is a Navy veteran with a decade of experience in investment banking, specializing in industry and company research [1]. - The analyst's goal is to achieve financial independence through dividend income within the next 5-7 years [1].

Group 1: Coca-Cola Performance - Coca-Cola reported a 5% increase in organic sales for the full year 2025, despite industry challenges [1] - The company anticipates a growth rate of 4% to 5% for 2026, which disappointed investors leading to a stock sell-off [1] Group 2: PepsiCo Comparison - PepsiCo's organic sales grew only 1.7% in 2025, indicating it is facing greater industry headwinds compared to Coca-Cola [3] - PepsiCo offers a higher dividend yield of 3.4%, compared to Coca-Cola's 2.7%, making it a more attractive option for income-focused investors [2][4] - Despite a slightly higher price-to-earnings ratio, PepsiCo's valuation metrics such as price-to-sales and price-to-book ratios are below their five-year averages, suggesting it may be undervalued [4] Group 3: Future Projections - PepsiCo projects organic sales growth of 2% to 4% for 2026, which is an improvement but still lags behind Coca-Cola [6] - The higher dividend yield from PepsiCo compensates for its slower growth rate, presenting a long-term investment opportunity [7] - PepsiCo's stock remains 15% below its all-time highs, while Coca-Cola's stock is near its peak, indicating differing market perceptions [7]

Group 1 - The core viewpoint of the news is that PepsiCo reported a mixed performance for Q4 and the full year of 2025, with revenue growth but a decline in net profit [1] - For the full year 2025, net revenue reached $93.925 billion, a year-on-year increase of 2.3%, while net profit attributable to PepsiCo was $8.240 billion, down 13.9% [1] - In Q4, revenue was $29.343 billion, reflecting a 5.6% year-on-year growth, exceeding market expectations, and non-GAAP core EPS was $2.26, up 15.3% year-on-year [1] Group 2 - The stock price of PepsiCo showed a fluctuation of 1.85% over the past week, with a year-to-date increase of 17.93% as of February 12, closing at $169.26 [2] - The stock experienced a seven-day consecutive rise and a monthly increase of approximately 21%, driven by better-than-expected earnings and a $10 billion buyback plan, although recent volatility indicates market concerns over pricing strategies [2] Group 3 - PepsiCo announced price reductions of up to 15% on certain snack products in the U.S. market to stimulate demand amid rising consumer price sensitivity [3] - The company is strengthening its supply chain in the Asia-Pacific region, maintaining or growing market share in China, with new production capacity projects in Xi'an supporting long-term development [3] - PepsiCo has increased its dividend for 54 consecutive years and initiated a $10 billion share buyback plan to enhance shareholder returns [3] Group 4 - Analyst opinions are divided, with some institutions attributing the stock price increase to valuation expansion rather than fundamental improvements [4] - Quant ratings suggest a "hold," with only 7 out of 23 Wall Street analysts recommending a "buy" [4] - There are warnings that the pricing strategy may trade off profit margins for a rebound in sales, necessitating close monitoring of future sales elasticity and gross margin changes [4]