Sunday, May 11, 2008

PEP looks attractive

In a previous analysis of PEP Cola Wars - Coke versus Pepsi, i concluded that PEP is a buy on dips below $68.

"Overall Pepsi has shown a much bigger progress than Coke over the past 10 years. In addition, it’s trading at a bargain multiple relative to its biggest competitor. And last but not least, its dividend growth is much higher than Coke. I would consider adding to Pepsi on dips below $68. I might also consider adding to Coca-Cola below $51."

Over the past several weeks the company has traded below 68 on a couple of occasions. I am considering buying some PEP this week, as long as the price is below $68.

In addition to that PEP recently announced an increase in its annual dividend from $1.50 to $1.70, which is a healthy 13.33% raise. The quarterly dividend of $0.425 is payable June 30, 2008, to shareholders of record on June 6, 2008.The ex-dividend date is June 4.

Disclosure: I do not own PEP or KO at the moment. This analysis is not a recommendation to buy or sell securities. Always consult a financial professional before investing.

Relevant Articles:

- Cola Wars - Coke versus Pepsi

- Diversification Matters

- Dividend Growth Stocks Watchlist

- My Strategy

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