Pepsi Bubbling Up - Low Valuation Signal

1. Pepsi is a well known global brand with a history of delivering earnings growth in any kind of economy. Over the last 5 years, it had a Return on Invested Capital of 46.2% and an Earnings yield of 8.1%

2. PEP pays a 3.25% dividend at the current price and trades at a Price Earnings (PE) multiple of 14.3X based on adjusted Earnings Per Share (EPS) of $4.41

3. The current valuation is near the low valuation that occurred at the bottom of the market in early 2009.

4. Market capitalization of $US 98 billion and S&P has a rating of 4 stars and target of $70.

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6. Low valuation signal at USD $63.25. Based on a continuation of the current earnings profile and trend, the Purple Chips target is $71.90 in the next 12 -18 months.

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