Cal-Maine Foods Inc (CALM), General Mills, Inc. (GIS), PepsiCo, Inc. (PEP): Investment Ideas From Your Breakfast Table

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Oats and Orange Juice

You may enjoy a glass of Tropicana orange juice, a bowl of Quaker Oats, or Cap’n Crunch cereal made by food and beverage conglomerate PepsiCo, Inc. (NYSE:PEP).

PepsiCo most commonly known for its sodas derives roughly half of its revenue from snacks and food. PepsiCo’s snack volume increased 3% versus 1% for its beverage volume in 2012. Factoring out acquisitions, currency fluctuations, etc. organic revenue grew 5% for PepsiCo, Inc. (NYSE:PEP) overall last year.

In 2012, PepsiCo’s cash to stockholder’s equity stood at 30%. It’s long-term and total debt to equity ratios stand at 105% and 233% respectively as of the end of 2012. Its operating income exceeds interest expense by 10 times.

In 2012, PepsiCo, Inc. (NYSE:PEP) paid out approximately 56% of its free cash flow in dividends. Currently the company pays $2.27 per share per year in dividends, translating into a yield of 2.8%.

With consumers shying away from perceived unhealthy sodas, it can capitalize on the increasing demands of healthier foods such as those made by the company’s Quaker Oats subsidiary and its Tropicana juice line. Its future may depend on it.


On the whole, these companies that make products that go into your typical American breakfast sell needed products, own recognizable brands, and possess a fairly wide moat or high barriers to entry. They each pay a decent dividend and their futures look bright. These companies make worthy additions to your Motley Fool Watch List (sign-in required).

William Bias has no position in any stocks mentioned. The Motley Fool recommends PepsiCo. The Motley Fool owns shares of PepsiCo.

The article Investment Ideas From Your Breakfast Table originally appeared on

William is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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