PepsiCo (PEP -0.45%) is another packaged food company with a large portfolio of leading brands. On the beverage side of the business, Pepsi, Mountain Dew, and Gatorade top the list. On the food side, Lay’s, Doritos, Quaker Oats, and Cheetos are just a few examples from the company’s portfolio.
Over the last few years, PepsiCo has faced challenges. These have included declining sales volumes in North America, particularly in its snack and beverage businesses, due to consumer pullback amid inflation and shifting preferences.
Consumers are becoming more price-conscious and cutting back on discretionary items like snacks and sugary drinks, which is impacting PepsiCo's core businesses. The rise of health-conscious eating habits and the popularity of weight-loss drugs are also contributing to a decline in demand for traditional snacks and beverages.
PepsiCo is adopting a more granular pricing approach, focusing on value interventions for specific products and channels rather than a blanket promotional strategy. The company's international business has been a bright spot, helping to offset weakness in its North American operations and further strengthening its overall pricing power.
PepsiCo has paid consecutive quarterly cash dividends since 1965. The stock yields just shy of 4% based on current share prices, a yield that has risen lately as share prices have been weaker.
5. Beyond Meat