Shares of PepsiCo (PEP -1.71%) gained 2.6% in April, according to data provided by S&P Global Market Intelligence. While that's not a huge gain, it was against the backdrop of an 8.8% decrease for the S&P 500 at the same time.
PepsiCo posted an excellent first-quarter earnings report in April demonstrating strong growth, which helped it stand out in a volatile market. It has also stayed about flat so far in May, about level with the S&P 500.
PepsiCo has a broad range of food products comprising beverage, snack, and breakfast segments. Snacks and breakfast were key to its strong business under lockdowns, and now that most regions have opened up, its beverage category is back to growth as well.
In the 2022 first quarter, total revenue increased 9.3% year over year. Frito-Lay snack sales increased 14%, and Quaker breakfast food sales increased 11%. Global beverage sales were strong, particularly in Latin America, where sales increased 19%, and where its biggest decline was last year.
Earnings per share (EPS) increased 148% to $3.06. PepsiCo raised some prices as it deals with increasing costs due to supply chain problems and inflation, and it successfully passed it on to consumers.
Management raised full-year guidance from a 6% year-over-year revenue increase to 8%. It also raised guidance for core constant EPS to an 8% increase. First-quarter core constant EPS beat Wall Street expectations of $1.23, coming in at $1.29.
The market posted extreme volatility last week, swinging from highs to lows and back. Usually, it's the riskier stocks that wreak havoc on your portfolio during these periods. That's why investors have been moving funds into safe stocks, like PepsiCo. PepsiCo stock is up 17% over one year, while the S&P 500 is down 3%.
Last week, the company announced a 7% dividend increase for a $4.60 annual dividend. This is its 50th annual dividend raise, placing it in the exclusive Dividend King club when it gets paid out in June. This is another mark of a solid, reliable stock. PepsiCo is demonstrating why it's a value stock to anchor a diversified portfolio, providing some security under adverse market conditions.