Investment Opportunities in PepsiCo and Lowe's Amid Market Trends
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 19 2026
0mins
Source: Fool
- PepsiCo's Growth Strategy: Despite challenges in the food and beverage sector due to the rise of weight-loss drugs, PepsiCo has successfully achieved an 8.5% net revenue growth by improving nutritional quality and reducing portion sizes, demonstrating its adaptability in adverse market conditions.
- Stable Dividend Yield: PepsiCo has raised its dividend for 54 consecutive years, currently offering a 3.6% yield, which positions it as a reliable source of passive income for investors over the next 50 years, reflecting its strong profitability and market position.
- Lowe's Market Recovery: Although the U.S. housing market is sluggish, Lowe's comparable-store sales have turned positive in the last three quarters, indicating revenue growth from existing locations and showcasing its resilience in tough times.
- Future Growth Potential: As the housing market normalizes, Lowe's demand is expected to see significant growth; despite a current dividend yield of 1.89%, management focuses more on stock buybacks, having reduced shares outstanding by 37% over the past decade, providing a solid capital return outlook for investors.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy PEP?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on PEP
Wall Street analysts forecast PEP stock price to rise
12 Analyst Rating
6 Buy
6 Hold
0 Sell
Moderate Buy
Current: 148.850
Low
144.00
Averages
161.90
High
172.00
Current: 148.850
Low
144.00
Averages
161.90
High
172.00
About PEP
PepsiCo, Inc. is a global beverage and convenient food company. The Company’s segments include PepsiCo Foods North America (PFNA), PepsiCo Beverages North America (PBNA), International Beverages Franchise (IB Franchise), Europe, Middle East and Africa (EMEA), Latin America Foods (LatAm Foods), and Asia Pacific Foods. PFNA segment includes all of its convenient food businesses in the United States and Canada. PBNA segment includes all of its beverage businesses in the United States and Canada. IB Franchise segment includes its international franchise beverage businesses, as well as its SodaStream business. EMEA segment includes its convenient food businesses and beverage businesses with Company-owned bottlers in Europe, the Middle East and Africa. LatAm Foods segment includes all of its convenient food businesses in Latin America. Asia Pacific Foods segment consists of its convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Three Quality Dividend Stocks to Invest In
- Real Estate Investment Trust: Realty Income, a retail-focused REIT, offers a current dividend yield of 5.2%, supported by stable rental income, and while its stock has dropped over 8% due to rising interest rates, long-term holding can yield compounding benefits.
- Food and Beverage Giant: PepsiCo, a 'Dividend King' with 50 consecutive years of dividend increases, currently has a 3.8% dividend yield; despite facing challenges from reduced consumer spending, its organic sales grew 2.6% year-over-year in 2026, with net revenue up 8.5%, showcasing strong market adaptability.
- Fast Food Leader: McDonald's, with over 45,000 locations, is on the verge of becoming a 'Dividend King' with a 2.6% dividend yield; despite a stock price decline due to industry weakness, analysts project annualized earnings growth of 7% to 8% over the next three to five years, making its current valuation of 23 times earnings attractive for investors.
- Investment Timing: All three companies are available for under $500, making them suitable for investors seeking stable dividend income; despite economic challenges, their strong brands and market positions present a wise choice for capital allocation.
See More
Non-Carbonated Drinks Surge as Young Consumers Shift Preferences
- Market Trend Shift: According to Circana data, carbonated beverage volumes dropped 1.1% in 2024, while ready-to-drink cocktails surged by 46.4%, indicating a growing consumer preference for non-carbonated drinks, particularly among younger generations.
- Impact of Young Consumers: Generation Z's preference for non-carbonated beverages is significant, with many believing carbonation leads to bloating, prompting beverage companies to innovate more in fizz-free products to meet this generation's health and functionality demands.
- Intensifying Brand Competition: Brands like Surfside have rapidly emerged as key players, with Surfside becoming the fastest-growing alcohol brand in the U.S. in 2024, showcasing strong demand for non-carbonated options in the alcoholic beverage market.
- Packaging and Marketing Innovation: As non-carbonated drinks gain popularity, aluminum cans have become a new trend, with brands like Liquid Death and Celsius successfully attracting young consumers by emphasizing fizz-free attributes and health-conscious branding, driving sales growth.
See More
PepsiCo Plans Price Increase on Small Chip Bags
- Price Increase Plan: PepsiCo is set to raise prices on certain small bags of chips by $0.10 to $0.20, expected to take effect in late June, as a response to rising production, distribution, and retail costs in the U.S.
- Historical Price Stability: Some single-serve chip prices have remained unchanged for nearly 15 years, and this price hike reflects the company's reaction to cost pressures, which may influence consumer purchasing decisions.
- First Quarter Performance: PepsiCo's convenient food segment showed strong results in Q1, with revenue increasing by 8.5% year-over-year to $19.4 billion, surpassing market expectations, indicating the company's adaptability post-price adjustments.
- Regional Sales Disparity: While total food volume rose by 4%, the North America food segment only grew by 1%, contrasting with a 7% increase in the Europe, Middle East, and Africa segment, highlighting the need for strategic adjustments across different markets.
See More
PepsiCo Plans Price Hike on Chips Amid Rising Costs
- Reason for Price Increase: PepsiCo is preparing to raise prices on some smaller bags of chips by 10 to 20 cents due to rising production, distribution, and retail costs in the U.S., indicating a strategic adjustment to manage cost pressures.
- Product Scope: The price hike will affect certain single-serve bags currently retailing at $2.69, along with smaller bags often sold at two for $1, demonstrating the company's commitment to maintaining profitability amidst rising costs.
- Timeline for Implementation: The price increases are expected to take effect in the coming weeks, with some single-serve products seeing price adjustments starting in late June, reflecting the company's sensitivity to market dynamics and its ability to respond quickly.
- Market Performance: Despite the impending price hikes, PepsiCo exceeded Wall Street estimates in April, partly due to previous price cuts on salty snacks in the U.S., showcasing the company's flexibility in price management.
See More
Coca-Cola vs. PepsiCo Revenue Comparison
- Revenue Stability: Coca-Cola generated $49 billion in revenue over the past 12 months with a net income margin of approximately 32%, showcasing its strong competitive position and stable profitability in the beverage market, reflecting its high-margin business model.
- PepsiCo's Volatility: PepsiCo's revenue reached $95 billion during the same period, but with a net income margin of only 12%, its diversified business leads to greater revenue fluctuations, indicating uncertainty in its market performance.
- Investment Return Performance: Over the past two years, Coca-Cola's stock has risen by 36%, while PepsiCo's has declined by 12%, demonstrating Coca-Cola's superior performance in terms of investor returns, thereby attracting more investor interest.
- Future Growth Potential: Although PepsiCo generates nearly double the annual revenue of Coca-Cola, its investments in product development and cost efficiency will be crucial in determining whether it can enhance earnings growth and drive stock price increases in the future.
See More
Financial Comparison of Coca-Cola and PepsiCo
- Revenue Performance Difference: Coca-Cola generated $49 billion in revenue over the past 12 months, while PepsiCo reached $95 billion; despite PepsiCo's higher revenue, Coca-Cola's stability makes it more attractive to investors.
- Profit Margin Comparison: Coca-Cola's net income margin stands at approximately 32%, significantly higher than PepsiCo's 12%, reflecting Coca-Cola's advantage in high-margin syrup sales and the effectiveness of its business model.
- Market Performance: Over the past two years, Coca-Cola's stock has risen by 36%, while PepsiCo has seen a 12% decline, indicating that Coca-Cola has delivered better returns to investors, drawing more attention.
- Future Investment Directions: PepsiCo is investing in product development and AI capabilities to boost earnings growth; although the revenue gap is substantial, improving profit margins could positively impact its stock price.
See More
Three Quality Dividend Stocks to Invest In
- Real Estate Investment Trust: Realty Income, a retail-focused REIT, offers a current dividend yield of 5.2%, supported by stable rental income, and while its stock has dropped over 8% due to rising interest rates, long-term holding can yield compounding benefits.
- Food and Beverage Giant: PepsiCo, a 'Dividend King' with 50 consecutive years of dividend increases, currently has a 3.8% dividend yield; despite facing challenges from reduced consumer spending, its organic sales grew 2.6% year-over-year in 2026, with net revenue up 8.5%, showcasing strong market adaptability.
- Fast Food Leader: McDonald's, with over 45,000 locations, is on the verge of becoming a 'Dividend King' with a 2.6% dividend yield; despite a stock price decline due to industry weakness, analysts project annualized earnings growth of 7% to 8% over the next three to five years, making its current valuation of 23 times earnings attractive for investors.
- Investment Timing: All three companies are available for under $500, making them suitable for investors seeking stable dividend income; despite economic challenges, their strong brands and market positions present a wise choice for capital allocation.
See More
Non-Carbonated Drinks Surge as Young Consumers Shift Preferences
- Market Trend Shift: According to Circana data, carbonated beverage volumes dropped 1.1% in 2024, while ready-to-drink cocktails surged by 46.4%, indicating a growing consumer preference for non-carbonated drinks, particularly among younger generations.
- Impact of Young Consumers: Generation Z's preference for non-carbonated beverages is significant, with many believing carbonation leads to bloating, prompting beverage companies to innovate more in fizz-free products to meet this generation's health and functionality demands.
- Intensifying Brand Competition: Brands like Surfside have rapidly emerged as key players, with Surfside becoming the fastest-growing alcohol brand in the U.S. in 2024, showcasing strong demand for non-carbonated options in the alcoholic beverage market.
- Packaging and Marketing Innovation: As non-carbonated drinks gain popularity, aluminum cans have become a new trend, with brands like Liquid Death and Celsius successfully attracting young consumers by emphasizing fizz-free attributes and health-conscious branding, driving sales growth.
See More
PepsiCo Plans Price Increase on Small Chip Bags
- Price Increase Plan: PepsiCo is set to raise prices on certain small bags of chips by $0.10 to $0.20, expected to take effect in late June, as a response to rising production, distribution, and retail costs in the U.S.
- Historical Price Stability: Some single-serve chip prices have remained unchanged for nearly 15 years, and this price hike reflects the company's reaction to cost pressures, which may influence consumer purchasing decisions.
- First Quarter Performance: PepsiCo's convenient food segment showed strong results in Q1, with revenue increasing by 8.5% year-over-year to $19.4 billion, surpassing market expectations, indicating the company's adaptability post-price adjustments.
- Regional Sales Disparity: While total food volume rose by 4%, the North America food segment only grew by 1%, contrasting with a 7% increase in the Europe, Middle East, and Africa segment, highlighting the need for strategic adjustments across different markets.
See More
PepsiCo Plans Price Hike on Chips Amid Rising Costs
- Reason for Price Increase: PepsiCo is preparing to raise prices on some smaller bags of chips by 10 to 20 cents due to rising production, distribution, and retail costs in the U.S., indicating a strategic adjustment to manage cost pressures.
- Product Scope: The price hike will affect certain single-serve bags currently retailing at $2.69, along with smaller bags often sold at two for $1, demonstrating the company's commitment to maintaining profitability amidst rising costs.
- Timeline for Implementation: The price increases are expected to take effect in the coming weeks, with some single-serve products seeing price adjustments starting in late June, reflecting the company's sensitivity to market dynamics and its ability to respond quickly.
- Market Performance: Despite the impending price hikes, PepsiCo exceeded Wall Street estimates in April, partly due to previous price cuts on salty snacks in the U.S., showcasing the company's flexibility in price management.
See More
Coca-Cola vs. PepsiCo Revenue Comparison
- Revenue Stability: Coca-Cola generated $49 billion in revenue over the past 12 months with a net income margin of approximately 32%, showcasing its strong competitive position and stable profitability in the beverage market, reflecting its high-margin business model.
- PepsiCo's Volatility: PepsiCo's revenue reached $95 billion during the same period, but with a net income margin of only 12%, its diversified business leads to greater revenue fluctuations, indicating uncertainty in its market performance.
- Investment Return Performance: Over the past two years, Coca-Cola's stock has risen by 36%, while PepsiCo's has declined by 12%, demonstrating Coca-Cola's superior performance in terms of investor returns, thereby attracting more investor interest.
- Future Growth Potential: Although PepsiCo generates nearly double the annual revenue of Coca-Cola, its investments in product development and cost efficiency will be crucial in determining whether it can enhance earnings growth and drive stock price increases in the future.
See More
Financial Comparison of Coca-Cola and PepsiCo
- Revenue Performance Difference: Coca-Cola generated $49 billion in revenue over the past 12 months, while PepsiCo reached $95 billion; despite PepsiCo's higher revenue, Coca-Cola's stability makes it more attractive to investors.
- Profit Margin Comparison: Coca-Cola's net income margin stands at approximately 32%, significantly higher than PepsiCo's 12%, reflecting Coca-Cola's advantage in high-margin syrup sales and the effectiveness of its business model.
- Market Performance: Over the past two years, Coca-Cola's stock has risen by 36%, while PepsiCo has seen a 12% decline, indicating that Coca-Cola has delivered better returns to investors, drawing more attention.
- Future Investment Directions: PepsiCo is investing in product development and AI capabilities to boost earnings growth; although the revenue gap is substantial, improving profit margins could positively impact its stock price.
See More
