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

The Coca-Cola Company (NYSE:KO), meanwhile, has stood still throughout its history. It’s a soda company, and all indications are it will remain a soda company for better or worse. To that end, consider that Coca-Cola’s sparkling beverage division, which includes such brands as Coca-Cola and Sprite, account for roughly 75% of the company’s sales.

The lesson here: You can’t always get what you want

Pepsi is a company that I admire for many reasons. It has a long and extremely successful operating history and treats its shareholders very well, through both meaningful share repurchases and a dependable, rising dividend.

Moreover, I think the company’s CEO, Indra Nooyi, has the vision and good sense to see what’s coming along the consumer landscape, which is a generational shift to healthier foods and drinks.

That being said, while I would love to count myself among PepsiCo, Inc. (NYSE:PEP)’s shareholders, at the present time I cannot commit to buy. Pepsi is one of those investing scenarios in which I must forcefully separate emotion from logic. I love Pepsi products and would also love to own its shares and receive an ever-increasing share of its business by reinvesting dividends. However, I can’t bring myself to pay 21 times trailing earnings and accept a yield lower than 3.5%. As a result, for the time being I will watch Pepsi from afar, hoping for a better buying opportunity down the road.

Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends The Coca-Cola Company (NYSE:KO) and PepsiCo. The Motley Fool owns shares of PepsiCo, Inc. (NYSE:PEP).

The article Is Pepsi a Good Stock to Buy? originally appeared on

Robert 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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