Is PepsiCo, Inc. (PEP) a Good Stock to Buy?

PepsiCo, Inc. (NYSE:PEP) has a long list of brands that appeal to consumers. The $125 billion company has taken measurable steps to diversify its product portfolio in recent years, proving that it is much more than just a soda company. To that end, the company’s revenue is evenly split between food and beverages. In total, Pepsi has 22 brands that each brings in at least $1 billion in annual sales.

The stock has rallied strongly in just the past few months, and as a result, begs the question: is the stock still a good buy?

Not the only soda giant in town

Of course, no discussion of PepsiCo, Inc. (NYSE:PEP) is complete without also mentioning its twin rival The Coca-Cola Company (NYSE:KO). The soda juggernaut, which counts Warren Buffett among its financial backers, is a corporate legend in its own right.

You can’t get much more in the way of slow-and-steady than with Coca-Cola and Pepsi. The Coca-Cola Company (NYSE:KO) raised its dividend in February this year, representing the 51^st consecutive annual dividend increase for the company.

PepsiCo, Inc. (NYSE:PEP) soon followed suit, increasing its own payout in April for the 41^st year in a row.

A smaller industry player is Dr Pepper Snapple Group Inc. (NYSE:DPS), which pays a slightly higher dividend than its rivals, at 3.25% annualized. The company also trades at a more attractive 15 times trailing earnings, which compares favorably to the P/E multiples on The Coca-Cola Company (NYSE:KO) and Pepsi, which both exceed 20 times. However, Dr Pepper Snapple Group Inc. (NYSE:DPS) does not have nearly as much brand strength as PepsiCo, Inc. (NYSE:PEP) or Coca-Cola, and cannot offer the relative safety of being among the biggest companies on Earth like its two rivals can.

Both The Coca-Cola Company (NYSE:KO) and Pepsi have enjoyed big share price rallies in a relatively short amount of time. At its recent prices, Pepsi has risen more than 20% just since the beginning of 2013. And, keep in mind that these returns don’t even include the generous dividend payouts Coca-Cola and Pepsi shareholders are accustomed to.

That being said, I prefer PepsiCo, Inc. (NYSE:PEP) to Coca-Cola for a fairly straightforward reason, which is the structural nature of their respective businesses. As I mentioned previously, there’s more to Pepsi than meets the eye. The company has broadened its product portfolio and has many brands that appeal to the consumer trend toward healthier eating habits.