3 Reasons for Investors to Love PepsiCo, Inc. (PEP) in 2013

Snack on this
Unlike soda competitors such as Coca-Cola or Dr Pepper Snapple Group Inc. (NYSE:DPS) , Pepsi doesn’t rely solely on beverage sales. That’s good news for the stock, since soft-drink demand in North America continues to fizzle.

The company’s snack business, on the other hand, remains a strong point for Pepsi. In fact, thanks to its Frito-Lay business, Pepsi is the largest snack-food company by market share worldwide. According to Pepsi CEO Indra Nooyi, Pepsi commands “the No. 1 savory category share position in virtually every key region across the globe.”

Dominating the snack-food industry is important, because it greatly enhances Pepsi’s competitive moat. Moreover, the likelihood that a new competitor could unseat Pepsi’s Frito-Lay brands in this segment is slim at best.

Of course, that’s not to say that Pepsi’s snack business is void of any competition. Kellogg Company (NYSE:K) and Kraft Foods Group Inc (NASDAQ:KRFT) represent two of Pepsi’s closest rivals in the snack-food space. Kellogg beefed up its snacks portfolio last year, when it purchased the Pringles brand from The Procter & Gamble Company (NYSE:PG), in a deal valued around $2.7 billion. By adding the popular canned chips to its growing snacks portfolio, Kellogg gained international exposure with Pringles’ strong presence in more than 140 countries. In fact, the Pringles deal essentially tripled Kellogg’s global snack business — positioning it as a true competitor to PepsiCo.

Nevertheless, with the global snack-food market set to top $334 billion by 2015, Pepsi is right where it needs to be in terms of its global footprint and brand power.

Bottom line
There are plenty of reasons to get excited about PepsiCo today — from all-cash dividend payouts and share buybacks, to a promising international strategy, and a snack portfolio that boasts 22 brands that each pull in annual sales of more than $1 billion.

The article 3 Reasons for Investors to Love Pepsi in 2013 originally appeared on Fool.com and is written by Tamara Rutter.

Fool contributor Tamara Rutter has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, PepsiCo, and Procter & Gamble and owns shares of PepsiCo.

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