Nasdaq Sell-Off: This Magnificent Stock Is a Rare Bargain

Core Viewpoint - The current market environment presents challenges for investors, with the Nasdaq Composite index down approximately 13% from its all-time high, while PepsiCo has shown resilience and growth potential, making it an attractive investment opportunity [1][2]. Company Overview - PepsiCo has demonstrated steady growth through its ability to adapt to changing consumer preferences, distinguishing itself from tech sector giants [3]. - The company has a diverse portfolio of brands, including Lay's, Doritos, and Gatorade, sold in over 200 countries, contributing to its long history of growth [4]. Financial Performance - For the year ended December 31, PepsiCo achieved a 2% year-over-year increase in organic revenue despite flat beverage volumes, driven by successful pricing initiatives and growth in Europe and Latin America [5]. - Core earnings per share (EPS) reached a record $8.16 for 2024, reflecting a 9% increase from 2023, with expectations for continued growth in 2025 [6]. Investment Appeal - PepsiCo's stock is currently trading at around 19 times its consensus 2025 EPS, significantly below its five-year average multiple of 26, indicating potential undervaluation [9]. - The company offers a 3.5% dividend yield, with a history of increasing its annual payout for 53 consecutive years, classifying it as a Dividend King [10]. Long-term Outlook - PepsiCo is well-positioned to navigate market volatility, benefiting from its strong fundamentals and international presence, making it a suitable addition to a diversified portfolio [7][8]. - The stock's combination of attractive valuation and long-term growth potential positions it favorably for rewarding shareholders in the future [11].