PepsiCo, Inc. (NYSE:PEP) is a renowned food and beverage company with a diversified product portfolio that includes a long list of acceptable brands. The company dominates the worldwide carbonated soft drink industry, along with market leader, The Coca-Cola Company (NYSE:KO). The two giant producers of non-alcoholic beverages are well-known globally as recognizable brands in the consumer beverage industry. Early this month, both companies reported better-than-expected quarterly earnings, proving to shareholders that their products are still much-liked by their many consumers.
Following the release of the company’s better-than-expected 2013 first quarter earnings results, PepsiCo, Inc. (NYSE:PEP) stock rallied with a 5% price gain to attain a new high in the last year. That is something to cheer, and based on the Street ratings, some analysts have now placed a “buy” recommendation on PepsiCo, Inc. (NYSE:PEP) stock. However, considering that the stock has gained more than 21% in the last 52 weeks, it is normal for a critical mind to ask: is it still the right time to buy PepsiCo, Inc. (NYSE:PEP) stock?
Looking at the metrics of the stock, I think it is still the right time to buy PepsiCo, Inc. (NYSE:PEP). Besides, the good run we have witnessed in the stock market lately isn’t peculiar to only PepsiCo, Inc. (NYSE:PEP). Indeed, a few of the top range companies, including PepsiCo, appear just too overvalued to be considered great buys at the moment. The recent price performances of a few of other consumer staple stocks, such as Johnson & Johnson (NYSE:JNJ), General Mills, Inc. (NYSE:GIS), and The Coca-Cola Company (NYSE:KO), attest to this assertion. Each of these stocks has rallied price gains by over 20% year-to-date due to improved earnings and superb levels of profitability.
Johnson & Johnson (NYSE:JNJ) has recently released improved financial results, with increases recorded in major aspects of its financials, including revenue, which went up by 3%, and a 10% increase in its diluted earnings per share over the previous year. Unfortunately, many investors might find Johnson & Johnson too expensive now, as the stock is currently trading at its all-time high.
The upsurge in price performances of these stocks happened because investors have been looking and scrambling for yield anywhere they can find it. These companies, including PepsiCo, are still highly profitable and are certain to keep giving good dividend payouts to investors for years to come. As long as interest rates remain incredibly low, investors are still likely to continue to scramble for these high yield stocks.