Core Viewpoint - PepsiCo has ended a streak of profit declines by beating fourth-quarter earnings expectations and increasing its dividend by 4%, despite lowering its profit growth outlook [1] Earnings Results - PepsiCo's stock experienced a pullback in early trading following a lowered profit-growth outlook, even after reporting stronger-than-expected earnings [1] - The company reported strength in its international businesses, contributing to the earnings beat [1] - Revenue growth exceeded Wall Street projections due to increased pricing, although the volume of products sold declined compared to the previous year [1] - The decline in volume was attributed to weakness in convenient foods, which offset gains in the beverage segment [1]

Group 1 - Fundsmith Equity Fund reported a return of 0.8% for its T Class Accumulation shares in 2025, significantly underperforming the MSCI World Index which returned 12.8% [1] - The fund's underperformance was attributed to index concentration, the growth of assets in Index Funds, and weakness in the dollar [1] - Since inception, the fund has outperformed the index by 1.7% per annum [1] Group 2 - PepsiCo, Inc. (NASDAQ:PEP) experienced a one-month return of -5.99% and a 52-week loss of 2.48% [2] - As of January 12, 2026, PepsiCo's stock closed at $141.36 per share, with a market capitalization of $193.533 billion [2] - Fundsmith highlighted concerns regarding the impact of weight loss drugs on PepsiCo's snack business and the challenges faced by the alcoholic drinks sector due to changing drinking habits among Generation Z and cannabis legalization [3] Group 3 - PepsiCo is not among the 30 Most Popular Stocks Among Hedge Funds, with 68 hedge fund portfolios holding its stock at the end of Q3 2025, unchanged from the previous quarter [4] - While PepsiCo is recognized for its investment potential, certain AI stocks are considered to offer greater upside potential with less downside risk [4]

Financial Performance - PepsiCo, Inc. reported fiscal third-quarter results for 2025, with an EPS of $2.29, exceeding consensus estimates by $0.03 [1] - The company's revenue reached $23.84 billion, reflecting a year-over-year growth of 2.65% and surpassing estimates by $89.71 million [1] Management Outlook - Management anticipates low single-digit organic revenue growth, with core currency EPS expected to be approximately in line with the previous year [2] - The focus remains on accelerating growth and optimizing the cost structure [2] Analyst Ratings - Following the earnings call, Wells Fargo raised its price target on PepsiCo from $150 to $154 while maintaining a Hold rating on the stock [3] - PepsiCo is recognized as an international company producing beverages and convenient foods under well-known brand names [3]

Core Insights - PepsiCo, Inc. reported strong third-quarter 2025 results with revenues and earnings per share (EPS) exceeding estimates, although EPS showed a year-over-year decline [1][10] - The company demonstrated accelerated net revenue growth compared to the previous quarter, indicating resilience in a challenging environment [1][2] Financial Performance - Core EPS for the third quarter was $2.29, surpassing the Zacks Consensus Estimate of $2.27, but declined 0.9% year over year [3] - Reported net revenues reached $23.94 billion, a 2.6% increase year over year, beating the Zacks Consensus Estimate of $23.87 billion [4] - The reported gross profit decreased by 0.8% year over year to $12.8 billion, with a core gross profit decline of 0.4% to $12.9 million [5][7] - Operating income was reported at $3.6 billion, down 7.8% year over year, while core operating income fell 0.9% to $4.2 billion [7] Segment Performance - Revenue growth was observed across most operating segments, with notable increases in North America and international markets, except for the IB Franchise segment [9][11] - Organic revenues improved in several segments, including a 2% increase for PBNA and 5.5% for EMEA, while PFNA and IB Franchise saw declines [11] Financial Stability - As of the end of Q3 2025, PepsiCo had cash and cash equivalents of $8.1 billion and long-term debt of $44.1 billion [12] - Net cash provided by operating activities was $5.5 million, down from $6.2 billion in the previous year [12] Future Outlook - For 2025, PepsiCo aims for low-single-digit organic revenue growth and steady core EPS performance, with a focus on innovation and cost optimization [13][14] - The company anticipates currency headwinds to impact revenues and core EPS by 0.5 percentage points in 2025 [15] - PepsiCo plans to return $8.6 billion to shareholders in 2025, including $7.6 billion in dividends and $1 billion in share repurchases [16]

Core Viewpoint - Companies with a strong history of dividend payments and increases, such as PepsiCo, Black Hills, and Tyson Foods, are attractive to income-focused investors, offering dividend yields between 3% and 4% [1] Group 1: PepsiCo - PepsiCo has raised its dividends for 53 consecutive years, with a recent increase of 5% to $1.4225 per share, resulting in an annual dividend of $5.69 per share [3] - The current dividend yield for PepsiCo is 4.02% [3] - As of June 30, PepsiCo's annual revenue was $91.75 billion, and it reported Q2 2025 EPS of $2.12 and revenues of $22.73 billion, both exceeding consensus estimates [4] Group 2: Black Hills - Black Hills has a 55-year history of consecutive dividend increases, with the latest hike raising the quarterly payout from $0.65 to $0.676 per share, equating to an annual figure of $2.70 per share [6] - The current dividend yield for Black Hills is 4.63% [6] - As of June 30, Black Hills' annual revenue was $2.24 billion, and it reported Q2 2025 revenues of $439 million, which fell short of the consensus estimate of $448.40 million, while EPS of $0.38 exceeded the consensus of $0.37 [7] Group 3: Tyson Foods - Tyson Foods has increased its dividends annually for the past 12 years, with the most recent increase raising the quarterly payout from $0.49 to $0.50 per share, resulting in an annual dividend of $2 per share [9] - The current dividend yield for Tyson Foods is 3.58% [9]

Group 1 - PepsiCo, Inc. is recognized as a "premier growth company" by Jim Cramer, emphasizing its value in a diversified portfolio of growth stocks [1] - Elliott Management has taken a significant $4 billion stake in PepsiCo, indicating potential for change and growth within the company [1] - The current stock price of PepsiCo is $142, down from $196 two and a half years ago, and it now offers a yield of almost 4% due to this decline [1] Group 2 - PepsiCo produces and markets a variety of products including beverages, snacks, cereals, dairy, and drinks, showcasing its diverse portfolio [2] - While PepsiCo is seen as a potential investment, there are opinions that certain AI stocks may offer greater upside potential and less downside risk [2]