The global online food delivery market’s revenues jumped 27% year-over-year to $136.4 billion in 2020 as food joints saw a significant surge in orders compared to the pre-pandemic period.
The global food and beverages industry has been seeing solid demand lately as the easing of COVID-19 restrictions following substantial progress with mass vaccination programs facilitates people’s return to outdoor dining. Also, a recent increase in the child tax credit payments, which is characterized as an “underappreciated stimulus” by the Cowen analysts, is expected to spur consumer spending on staples and dining out. Consequently, the industry should benefit from an overall spending spree in 2021.
PepsiCo, Inc. (PEP)
PEP in Harrison, N.Y. is a global food, snack, and beverage company that operates in more than 200 countries. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East, and South Asia; and Asia Pacific, Australia and New Zealand and China Region.
On June 24, Fritos®, one of the flagship brands from PepsiCo’s Frito-Lay division, collaborated with Papa Murphy’s®, the largest Take ‘n’ Bake pizza brand in the nation, to introduce a new limited-edition pizza. This collaborative venture should help PEP to generate significant new revenues.
On May 28, PEP partnered with FAT (Fresh. Authentic. Tasty.) Brands Inc., to diversify its food and beverage portfolio and enhance customer experience.
PEP’s net revenues increased 20.5% year-over-year to $19.22 billion in its fiscal second quarter, ended June 12. Its operating profit grew 34.9% from its year-ago value to $3.13 billion. PEP’s net income came in at $2.37 billion, indicating a 43.1% rise year-over-year. The company’s EPS increased 44.1% year-over-year to $1.70.
The Street expects PEP’s revenues to increase 6.5% year-over-year to $19.26 billion in its fiscal third quarter, ending September 2021. A $1.75 consensus EPS estimate for the current quarter indicates a 5.4% rise from the same period last year. PEP also has a notable earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters.
Shares of PEP have gained 11.2% over the past six months to close yesterday’s trading session at $155.24. The stock gained 15.5% over the past year. It is currently trading above its 50-day and 200-day moving averages of $148.97 and $142.51, respectively, indicating an uptrend. PEP is currently trading 1.5% below its 52-week high of $157.54.
PEP has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
PEP also has a B grade for Sentiment and Quality. Among the 37 stocks in the Beverages industry, it is ranked #6.
Beyond what we’ve stated above, we have also rated PEP for Stability, Value, Momentum, and Growth. Click here to view all PEP ratings.
Mondelez International, Inc. (MDLZ)
Chicago-based MDLZ manufactures, markets, and sells snack food and beverage products worldwide.
On May 26, MDLZ agreed to acquire Chipita S.A., a high-growth key player in the Central and Eastern European croissants and baked snacks category. The acquisition should complement its existing portfolio and enable MDLZ’s international business to offer a broader bakery range, meeting the growing consumer demand in this segment.
In April, MDLZ and Olam Food Ingredients (OFI) formed a collaboration in Indonesia to create the world’s single largest sustainable commercial cocoa farm. This is a step forward in the company’s goal of establishing a sustainable and resilient cocoa supply.
MDLZ’s net revenues increased 7.9% year-over-year to $7.24 billion in its fiscal first quarter ended March 31. Its operating income grew 49.9% from its year-ago value to $1.28 billion, while its net income improved 30.3% year-over-year to $968 million. The company’s EPS increased 33.3% year-over-year to $0.68.
Analysts expect MDLZ’s revenues to increase 5.7% year-over-year to $7.05 billion in the current quarter, ending September 2021. A $0.74 consensus EPS estimate for the current quarter indicates a 17.5% rise from the same period last year. Furthermore, MDLZ surpassed the Street’s EPS estimates in each of the trailing four quarters.
The price of shares of MDLZ have gained 18.5% over the past year. The stock has gained 14.1% over the past six months to close yesterday’s trading session at $64.02. It is currently trading above its 50-day and 200-day moving averages of $63.21 and $59.47, respectively, indicating an uptrend. Moreover, the stock is currently trading 1.5% below its 52-week high of $64.97.
It is no surprise that MDLZ has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The stock also has a B grade for Stability, Sentiment, and Quality. It is ranked #24 among the 80 stocks in the Food Makers industry.
To see additional MDLZ ratings for Growth, Value, and Momentum, click here.
Want More Great Investing Ideas?
PEP shares were trading at $155.19 per share on Thursday afternoon, down $0.05 (-0.03%). Year-to-date, PEP has gained 6.25%, versus a 17.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|PEP||Get Rating||Get Rating||Get Rating|
|MDLZ||Get Rating||Get Rating||Get Rating|