PepsiCo's (NASDAQ:PEP) stock recently hit an all-time high after the beverages and packaged foods maker posted its fourth-quarter earnings. Yet investors might be wondering if the stock still has room to run after its near-30% rally over the past 12 months.

PepsiCo's stock isn't particularly cheap at 23 times forward earnings, and its forward yield of 2.6% can't match the yield of other dividend heavyweights. Nonetheless, I believe that PepsiCo remains a "best in breed" play in the tough packaged foods market for five simple reasons.

A glass of cola.

Image source: Getty Images.

1. Stable organic sales growth

Many packaged foods companies are struggling to squeeze out organic sales growth, as consumers pivot toward healthier foods and retailers launch more private label brands. PepsiCo's organic growth, however, remained broadly stable over the past five years:

YOY growth

2015

2016

2017

2018

2019

Organic revenue

5%

3.7%

2.3%

3.7%

4.5%

YOY = Year-over-year. Source: PepsiCo annual reports. *Constant currency basis.

PepsiCo expects that trend to continue with 4% organic sales growth in 2020. Analysts expect its reported revenue to also rise 4%.

2. Its strengths outweigh its weaknesses

PepsiCo owns a massive portfolio of beverage brands, including Pepsi, 7-Up, Mountain Dew, Tropicana, Gatorade, Lipton, and Aquafina. It also sells packaged foods through Frito-Lay and Quaker Foods.

PepsiCo generates revenue from six business segments: PepsiCo Beverages North America, Quaker Foods North America, Frito Lay North America, and its three international units. Its revenue rose across all those segments except the Asia, Middle East, and South Asia unit last year.

PepsiCo regularly hikes prices to offset the impact of lower shipments and inflation, which enables its stronger businesses to offset its weaker ones. Its revenue outlook for 2020 indicates that balancing act will succeed for the foreseeable future.

3. Stable core EPS growth

PepsiCo's "core" EPS, which lines up with its organic sales growth, grew consistently over the past few years before dipping 1% in 2019.

YOY growth

2015

2016

2017

2018

2019

Core EPS*

10%

9%

9%

9%

(1%)

YOY = Year-over-year. Source: PepsiCo annual reports. *Constant currency basis.

That decline was attributed to tough comparisons to asset-sale and refranchising gains in 2018, a higher tax rate, investments in its core business, and Quaker Foods' declining operating profits -- which were throttled by higher marketing expenses and commodity costs.

Most of those headwinds have already faded, and PepsiCo expects its core EPS to rise 7% on a constant currency basis in 2020, which matches Wall Street's expectations.

4. Low exposure to China

Many large American companies are worried about their exposure to China as the coronavirus outbreak disrupts supply chains and consumer spending habits. PepsiCo isn't one of them.

During a recent interview on CNBC, CFO Hugh Johnston stated that PepsiCo had temporarily closed its Chinese plants as a precautionary measure, but that all but one of those locations have since been reopened. Johnston also noted that China only accounts for less than 2% of PepsiCo's total revenue.

5. Product innovation

PepsiCo consistently expands into higher-growth markets. It bought health-oriented brands like Naked Juice, launched Stubborn Soda to reach the craft soda market, created Bubly to counter National Beverage's La Croix, and developed Mountain Dew Amp Game Fuel for the energy drink market.

It also recently launched Pepsi Cafe, a new drink that blends cola with coffee, to counter Coca-Cola's (NYSE:KO) expanded launch of Coca-Cola Plus Coffee. It also launched new flavors and variations of its Frito-Lay and Quaker products, and tested out unique promotional strategies -- including cashback rewards for customers who paired select drinks with snacks -- to generate media buzz.

All these moves indicate that PepsiCo will keep pace with Coca-Cola's latest innovations, and that it won't suffer the fate of companies like Kraft Heinz (NASDAQ:KHC)which have doomed their long-term prospects by favoring cost-cutting measures over fresh product launches.

The key takeaways

PepsiCo isn't a high growth stock, but it has a wide moat, generates stable growth, and it's raised its dividend annually for nearly half a century. Those facts make it a solid long-term investment and a "best in breed" play in the crowded packaged foods market.