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Thanks to the acquisition of two key bottlers, PepsiCo's (NYSE: PEP ) quarter looked a bit messy. But let's be honest: We don't really care about what happened. We only care about what's going to happen.
Pepsi's core earnings per share were $1.22, in line with what analysts were expecting. Boring, right? I told you.
And to be clear, when I talk about "what's going to happen," I'm not referring to the company's lowered top end of its 2010 growth projections, which has driven the stock's decline. That news is not ideal, but come on: You shouldn't be tracking PepsiCo on a quarter-to-quarter basis anyway. You need to look at the much bigger picture.
For PepsiCo, the most obvious brand -- its namesake cola -- is very low on the company's list of potential growth drivers, particularly in its home U.S. market. Sure, Pepsi can win some important market-share points as it continues to duke it out with Coca-Cola (NYSE: KO ) for U.S. supremacy. But it's a very low likelihood that colas on American soil will drive significant growth for either company.
Meanwhile, Pepsi's bottler acquisitions are expected to help the bottom line by driving efficiencies. But if cost efficiencies are PepsiCo's most exciting opportunities, we have little to look forward to here.
Fortunately, that's not the case. Savory snacks and beverages -- fizzy and otherwise -- are still PepsiCo's 800-pound gorilla, and emerging markets present the company with a huge opportunity. During PepsiCo's most recent quarter, the Latin American region as a whole performed well, and countries like Russia, China, India, Turkey, and Indonesia helped drive volume gains in both snacks and beverages.
Additionally, the company is pushing the "nutrition and healthy living" angle hard. During the quarter, it created the Global Nutrition Group -- a move designed to help drive CEO Indra Nooyi's vision of growing nutrition revenue from $10 billion to $30 billion by 2020.
That seems like a pretty interesting angle, considering the size and growth of that market segment. And unlike Altria (NYSE: MO ) , which has no hope of tapping the health-conscious consumer, PepsiCo's product portfolio -- which includes brands such as Gatorade, Tropicana, and Quaker -- does give the company a shot at selling a health-conscious image.
Of course, convincing consumers of the nutritional benefits of its products is only part of Pepsi's battle. It also has to fight the same foes assailing other brand giants like Procter & Gamble (NYSE: PG ) are facing: private-label competitors from retailers like Target (NYSE: TGT ) and Safeway (NYSE: SWY ) .
Personally, I happen to think that Nooyi's nutritional target is not only commendable, but also achievable. Combine that with growth in emerging markets, and the dribs and drabs the company can pick up in more penetrated markets, and I think analysts' 9%-per-year earnings growth target for Pepsi is achievable.
But of course, the real question is what the company's $66 stock price means in light of that prediction. I'd say that it's unlikely that Pepsi's stock will be unhealthy for investors' portfolios. It's a strong, well-run company with an enduring moat and a growing dividend yielding 2.9%.
At the same time, I wouldn't call the stock a bargain. At this price, it can probably deliver decent returns. But for those set on beating the market, there are better opportunities to jump on right now, while you wait for a better price on Pepsi.
I'm not convinced that Pepsi is a buy at present, but my fellow Foolish analysts think these five stocks are ready to be bought right now.