Shares of PepsiCo (DYNAMISM 0.01%) gained 2.6% in April, according to data provided by S&P Global Market Intelligence. While not a huge gain, it was against the backdrop of an 8.8% decline for the S&P500 the same time.
PepsiCo released an excellent first-quarter earnings report in April, showing strong growth, which helped it stand out in a volatile market. It’s also been roughly flat so far in May, around the same level as the S&P 500.
PepsiCo offers a wide range of food products including beverage, snack and breakfast segments. Snacks and breakfast have been key to the strength of its business during lockdowns, and now that most regions have opened up, its beverage category has also returned to growth.
In the first quarter of 2022, total revenue increased 9.3% year-over-year. Sales of Frito-Lay snacks increased 14% and sales of Quaker breakfast foods increased 11%. Global beverage sales were strong, particularly in Latin America, where sales rose 19% and saw their biggest decline last year.
Earnings per share (EPS) rose 148% to $3.06. PepsiCo raised some prices due to rising costs from supply chain issues and inflation, and successfully passed it on to consumers.
Management raised its full-year guidance from a 6% year-over-year revenue increase to 8%. He also raised the guidance for constant core EPS to an increase of 8%. First-quarter core constant EPS beat Wall Street expectations of $1.23, at $1.29.
The market has shown extreme volatility over the past week, going from highs to lows and back again. Usually, it’s the riskiest stocks that wreak havoc on your portfolio during these times. That’s why investors moved funds into safe stocks, like PepsiCo. PepsiCo stock is up 17% year on year, while the S&P 500 is down 3%.
Last week, the company announced a 7% dividend increase for an annual dividend of $4.60. This is its 50th annual dividend increase, putting it in the exclusive Dividend King club when it is paid in June. This is another mark of a solid and reliable stock. PepsiCo demonstrates why it’s a value stock for anchoring a diversified portfolio, providing some safety in adverse market conditions.