It is also important to note that in 2014, PepsiCo Inc. (NYSE:PEP) announced a target of reaching $5 billion in savings over the subsequent five years. The food and beverage giant already delivered roughly $3 billion in savings during the 2013 through 2015 period, and over $1 billion in savings in 2015 alone. Moreover, PepsiCo Inc. (NYSE:PEP) has paid quarterly cash dividends since 1965 and has increased its annualized dividend for 43 consecutive years, putting PepsiCo on track to join the hallowed list of Dividend Kings, which denote companies that have increased their annual dividend payments for more than 50 consecutive years. PepsiCo pays out an annualized dividend of $2.81 per share, which denotes a current dividend yield of 2.82%. The dividend payout ratio reached approximately 74% in 2015, which appears to be quite safe given the resilience of PepsiCo’s organic growth. The stock is priced at 19.84-times expected earnings, slightly below the forward P/E ratio of 20.30 for the Consumer Staples sector.
How are hedge funds trading PepsiCo Inc. (NYSE:PEP)?
At Q4’s end, a total of 58 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 2% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Nelson Peltz’s Trian Partners has the most valuable position in PepsiCo, Inc. (NYSE:PEP), worth close to $1.83 billion, comprising 14.8% of its total 13F portfolio. The second largest stake is held by Yacktman Asset Management, managed by Donald Yacktman, which holds a $1.44 billion position; 10.9% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism contain Boykin Curry’s Eagle Capital Management, Ken Fisher’s Fisher Asset Management, and Cliff Asness’ AQR Capital Management.
As one would reasonably expect, specific money managers have jumped into PepsiCo Inc. (NYSE:PEP) headfirst. Millennium Management, managed by Israel Englander, assembled the most valuable position in PepsiCo Inc. (NYSE:PEP). Millennium Management had $72.9 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $14.5 million position during the quarter. The following funds were also among the new PEP investors: Michael Platt and William Reeves’ BlueCrest Capital Mgmt., David Costen Haley’s HBK Investments, and George Hall’s Clinton Group.
The final page of this article discusses the hedge fund activity in several other companies that have market capitalizations similar to PEP.
