Share count
1.4Bpeak FY2016
← All companies ← PENN Manual PFE → ← MNST Beverages PRMB →
PEP, PepsiCo Inc.
Beverages consumer brand
PepsiCo sells snacks and drinks: chips and other convenient foods under names like Lay's, Doritos, Cheetos and Fritos, and beverages such as Pepsi-Cola and Gatorade. It makes these goods and moves them to retailers through its own operations, authorized bottlers and contract manufacturers, and the shopper buys them by the bag or the bottle. The money comes from selling a great many low-priced items, over and over, the world around.
Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories.
PFNA's products are sold to independent distributors and retailers.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$93.9B
+2.3% YoY · 6% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $96.9B 5-yr avg $88.6B
Revenue $24.2B +6.4% vs yr-ago qtr
Operating margin 16.6% yr-ago 7.9%
Net income $3.0B yr-ago $1.3B
Net margin 12.4% yr-ago 5.6%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- The whole case turns on one question: are these brands a franchise, or just corn, potatoes, sugar and salt in a printed bag? The first test is pricing — whether the names let the company raise prices past the cost of its crops and packaging without losing the shopper — and the second is the shelf, whether scale and its delivery routes keep rivals and the store's own label at bay. The filing's own worries are plain: some inputs come from a single supplier, and both demand and pricing bend with inflation and recession; watch, too, whether tastes turn against salty, sugary fare. The figures for margin and return on capital sit in the record below.
- Is it a good business?
- Return on capital has run in the teens (median 18%, above 15% in 9 of 10 years). Owner earnings agree: roughly 11% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.
Where the money comes from
read the 10-K →44% of revenue comes from outside the United States.
Revenue by geography, FY2025
- United States56%$52.2B
- All Other Countries19%$17.9B
- Mexico7%$6.9B
- Russia5%$4.8B
- Canada4%$3.7B
- China3%$2.6B
- Other6%$5.7B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
Revenue up 6.4% year over year; operating income up 124.9%
figures computed from the filing's XBRL
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMJun 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| $62.8B | $63.5B | $64.7B | $67.2B | $70.4B | $79.5B | $86.4B | $91.5B | $91.9B | $93.9B | $96.9B | RevenueRevenue |
| 55% | 55% | 55% | 55% | 55% | 53% | 53% | 54% | 55% | 54% | 54% | Gross marginGross mgn |
| 39% | 38% | 39% | 40% | 40% | 39% | 40% | 40% | 40% | 40% | 39% | SG&A / revenueSG&A/rev |
| 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | 1% | R&D / revenueR&D/rev |
| $9.8B | $10.3B | $10.1B | $10.3B | $10.1B | $11.2B | $11.5B | $12.0B | $12.9B | $11.5B | $14.4B | Operating incomeOp. inc. |
| 15.6% | 16.2% | 15.6% | 15.3% | 14.3% | 14.0% | 13.3% | 13.1% | 14.0% | 12.2% | 14.8% | Operating marginOp. mgn |
| $6.3B | $4.9B | $12.5B | $7.3B | $7.1B | $7.6B | $8.9B | $9.1B | $9.6B | $8.2B | $10.5B | Net incomeNet inc. |
| 26% | 49% | — | 21% | 21% | 22% | 16% | 20% | 19% | 19% | 20% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| $10.7B | $10.0B | $9.4B | $9.6B | $10.6B | $11.6B | $10.8B | $13.4B | $12.5B | $12.1B | $13.5B | Operating cash flowOp. cash |
| $2.4B | $2.4B | $2.4B | $2.4B | $2.5B | $2.7B | $2.8B | $2.9B | $3.2B | $3.5B | $3.6B | DepreciationDeprec. |
| $1.7B | $2.5B | ($5.8B) | ($334M) | $681M | $987M | ($1.2B) | $1.0B | ($593M) | $108M | ($913M) | Working capital & otherWC & other |
| $3.0B | $3.0B | $3.3B | $4.2B | $4.2B | $4.6B | $5.2B | $5.5B | $5.3B | $4.4B | $4.2B | CapexCapex |
| 4.8% | 4.7% | 5.1% | 6.3% | 6.0% | 5.8% | 6.0% | 6.0% | 5.8% | 4.7% | 4.3% | Capex / revenueCapex/rev |
| $8.3B | $7.7B | $7.0B | $7.2B | $8.1B | $8.9B | $8.0B | $10.5B | $9.3B | $8.6B | $9.3B | Owner earningsOwner earn. |
| 13.2% | 12.1% | 10.9% | 10.7% | 11.5% | 11.2% | 9.3% | 11.5% | 10.2% | 9.2% | 9.6% | Owner earnings marginOE mgn |
| $7.6B | $7.1B | $6.1B | $5.4B | $6.4B | $7.0B | $5.6B | $7.9B | $7.2B | $7.7B | $9.3B | Free cash flowFCF |
| 12.1% | 11.1% | 9.5% | 8.1% | 9.1% | 8.8% | 6.5% | 8.7% | 7.8% | 8.2% | 9.6% | Free cash flow marginFCF mgn |
| $212M | $61M | $1.5B | $2.7B | $6.4B | $61M | $873M | $314M | $256M | $3.4B | $3.4B | AcquisitionsAcquis. |
| $4.2B | $4.5B | $4.9B | $5.3B | $5.5B | $5.8B | $6.2B | $6.7B | $7.2B | $7.6B | $7.8B | Dividends paidDiv. paid |
| $3.0B | $2.0B | $2.0B | $3.0B | $2.0B | $106M | $1.5B | $1.0B | $1.0B | $1.0B | — | BuybacksBuybacks |
| 19% | 13% | 27% | 20% | 16% | 17% | 19% | 18% | 19% | 15% | 21% | ROICROIC |
| 56% | 44% | 86% | 49% | 53% | 47% | 52% | 49% | 53% | 40% | 47% | Return on equityROE |
| 19% | 3% | 52% | 14% | 12% | 11% | 16% | 13% | 13% | 3% | 12% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| $16.1B | $19.5B | $9.0B | $5.7B | $9.6B | $6.0B | $5.3B | $10.0B | $9.3B | $9.5B | $10.7B | Cash & investmentsCash+inv |
| $2.7B | $2.9B | $3.1B | $3.3B | $4.2B | $4.3B | $5.2B | $5.3B | $5.3B | $5.8B | $6.7B | InventoryInvent. |
| $6.2B | $6.7B | $7.2B | $8.0B | $8.9B | $9.8B | $10.7B | $11.6B | $11.0B | $11.7B | $24.5B | Accounts payablePayables |
| ($3.4B) | ($3.8B) | ($4.1B) | ($4.7B) | ($4.7B) | ($5.5B) | ($5.5B) | ($6.3B) | ($5.7B) | ($5.9B) | ($17.8B) | Operating working capitalOper. WC |
| $26.4B | $31.0B | $21.9B | $17.6B | $23.0B | $21.8B | $21.5B | $26.9B | $25.8B | $27.9B | $32.8B | Current assetsCur. assets |
| $21.1B | $20.5B | $22.1B | $20.5B | $23.4B | $26.2B | $26.8B | $31.6B | $31.5B | $32.8B | $35.1B | Current liabilitiesCur. liab. |
| 1.3× | 1.5× | 1.0× | 0.9× | 1.0× | 0.8× | 0.8× | 0.9× | 0.8× | 0.9× | 0.9× | Current ratioCurr. ratio |
| $14.4B | $14.7B | $14.8B | $15.5B | $18.8B | $18.4B | $18.2B | $17.7B | $17.5B | $18.9B | $19.1B | GoodwillGoodwill |
| $73.5B | $79.8B | $77.6B | $78.5B | $92.9B | $92.4B | $92.2B | $100.5B | $99.5B | $107.4B | $112.2B | Total assetsAssets |
| $36.9B | $39.3B | $32.3B | $32.1B | $44.1B | $40.3B | $39.1B | $44.1B | $44.3B | $49.2B | $43.9B | Total debtDebt |
| $20.8B | $19.8B | $23.3B | $26.3B | $34.6B | $34.3B | $33.7B | $34.1B | $35.0B | $39.7B | $33.2B | Net debt / (cash)Net debt |
| 7.3× | 8.9× | 8.3× | 11.0× | 8.9× | 6.0× | 12.3× | 14.6× | 14.0× | 10.3× | 12.7× | Interest coverageInt. cov. |
| $11.2B | $11.0B | $14.5B | $14.8B | $13.5B | $16.0B | $17.1B | $18.5B | $18.0B | $20.4B | $22.1B | Shareholders’ equityEquity |
| 0.5% | 0.5% | 0.4% | 0.4% | 0.4% | 0.4% | 0.4% | 0.4% | 0.4% | 0.3% | 0.3% | Stock comp / revenueSBC/rev |
| Per share | |||||||||||
| 1.45B | 1.44B | 1.43B | 1.41B | 1.39B | 1.39B | 1.39B | 1.38B | 1.38B | 1.37B | 1.37B | Shares out (diluted)Shares |
| $43.25 | $44.18 | $45.38 | $47.73 | $50.55 | $57.22 | $62.29 | $66.14 | $66.66 | $68.41 | $70.73 | Revenue / shareRev/sh |
| $4.36 | $3.38 | $8.78 | $5.20 | $5.11 | $5.48 | $6.42 | $6.56 | $6.95 | $6.00 | $7.63 | EPS (diluted)EPS |
| $5.71 | $5.33 | $4.92 | $5.13 | $5.79 | $6.41 | $5.80 | $7.59 | $6.78 | $6.29 | $6.78 | Owner earnings / shareOE/sh |
| $5.25 | $4.91 | $4.30 | $3.85 | $4.58 | $5.03 | $4.04 | $5.73 | $5.22 | $5.59 | $6.78 | Free cash flow / shareFCF/sh |
| $2.91 | $3.11 | $3.46 | $3.77 | $3.96 | $4.19 | $4.45 | $4.83 | $5.25 | $5.56 | $5.70 | Dividends / shareDiv/sh |
| $2.09 | $2.06 | $2.30 | $3.01 | $3.05 | $3.33 | $3.75 | $3.99 | $3.86 | $3.22 | $3.05 | Cap. spending / shareCapex/sh |
| $7.75 | $7.68 | $10.19 | $10.51 | $9.67 | $11.55 | $12.36 | $13.38 | $13.09 | $14.86 | $16.13 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | +5.2%/yr | +6.2%/yr |
| Owner earnings / share | +1.1%/yr | +1.7%/yr |
| EPS | +3.6%/yr | +3.2%/yr |
| Dividends / share | +7.5%/yr | +7.0%/yr |
| Capital spending / share | +4.9%/yr | +1.1%/yr |
| Book value / share | +7.5%/yr | +9.0%/yr |
The year, in the company's words
the filing →Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.
- Operating income-10.8%
“Operating profit decreased 11%, primarily driven by certain operating cost increases, impairment charges related to the Rockstar brand, a decline in organic volume, a 5-percentage-point impact of higher commodity costs and higher acquisition and divestiture-related charges.”
✓ figure matches the filed record
The record, charted
FY2016–2025Each measure over its full record; the current point and the worst year marked.
ROIC
15%low FY2017
Gross margin
54%low FY2022
Net debt ÷ owner earnings
4.6×peak FY2025
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$8.6Bowner earningsvs.$8.2Bnet incomelow FY2018
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cashEach year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.
FY2016FY2025
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business earned $8.6B of owner earnings, the operating cash left after the $3.5B it takes just to hold its position. It put $964M more into growth; free cash flow, after that spending, was $7.7B.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Reported net income | $8.2B | $9.6B | $9.1B | $8.9B | $7.6B |
| Depreciation & amortizationnon-cash charge added back | +$3.5B | +$3.2B | +$2.9B | +$2.8B | +$2.7B |
| Stock-based compensationreal costnon-cash, but a real cost | +$288M | +$362M | +$380M | +$343M | +$301M |
| Working capital & othertiming of cash in and out, other non-cash items | +$108M | −$593M | +$1.0B | −$1.2B | +$987M |
| Cash from operations | $12.1B | $12.5B | $13.4B | $10.8B | $11.6B |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −$3.5B | −$3.2B | −$2.9B | −$2.8B | −$2.7B |
| Owner earnings | $8.6B | $9.3B | $10.5B | $8.0B | $8.9B |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | −$964M | −$2.2B | −$2.6B | −$2.4B | −$1.9B |
| Free cash flow | $7.7B | $7.2B | $7.9B | $5.6B | $7.0B |
| Owner-earnings marginowner earnings ÷ revenue | 9% | 10% | 11% | 9% | 11% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $3.5B, roughly its depreciation, the rate its assets wear out). The other $964M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $288M), owner earnings is nearer $8.3B.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Will it survive?
- Can it pay its interest? 10.3×ComfortableOperating income $11.5B ÷ interest expense $1.1B
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? $39.7B · 3.4× operating profitMeaningful net debtCash $9.2B + ST investments $371M − debt $49.2B
What this means
Netting $9.5B of cash and short-term investments against $49.2B of debt leaves $39.7B owed, about 3.4× a year's operating profit (4.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- High through the cycle10-yr median, range 13%–27%; 15% latest = NOPAT $9.3B ÷ invested capital $60.4BIndustry peers: median 9%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 15% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Solid through the cycle10-yr median margin, range 9%–13%; latest $8.6B = operating cash $12.1B − maintenance capex $3.5BIndustry peers: median 10%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 9% of revenue this year, a 11% median across 10 years. It chose to put $964M more into growth, so free cash flow this year was $7.7B — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $288M of SBC) leaves $8.3B.
- Cash-backedCash from ops $12.1B ÷ net income $8.2B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returned more than it generatedDividends + buybacks $8.6B ÷ Owner Earnings $8.6B
What this means
The company returned more than it generated: against $8.6B of Owner Earnings, $8.6B (100%) went back to shareholders, $7.6B dividends, $1.0B buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $288M stock comp, the real buyback was about $712M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
- Investing or harvesting? 1.28×ExpandingCapex $4.4B ÷ depreciation $3.5B
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 3 of 6 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $93.9B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.85×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $49.2B vs ($4.8B) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth NearEarnings +33% over the record · +13%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $6.57/share (latest year $6.04), the averaged base the calculator's gate runs on, and book value is $14.95/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2016–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 10 of 10
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 9 of 10 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 16% → 13% (3-yr avg ends)
In the filing’s words The filing claims pricing power in its strongest form — price raised, volume held — yet the margin here has not widened to match. The claim leads the record; weigh them together.
What this means
Through the cycle the operating margin slipped — about 16% early to 13% lately, median 14% — competition or costs are biting in.
- Reinvestment, incremental ROIC 13%
What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
- Owner earnings growth +1%/yr
What this means
Owner earnings grew about 1% a year over the record.
- Worst year 2025 · 12.2% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −0.6%/yr
What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing Named as a competitive risk
Its FY2025 10-K names artificial intelligence as a competitive threat.
“Any inability on our part to anticipate or react to changes in consumer preferences and trends, or make the right strategic investments to do so, including investments in artificial intelligence and data analytics to understand consumer trends, can lead to reduced demand for our products, lead to inventory write-offs o…”
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Jun 13, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$32.8B
- Cash & short-term investments$10.7B
- Inventory$6.7B
- Other current assets$15.3B
Current liabilities$35.1B
- Debt due within a year$1.6B
- Accounts payable$24.5B
- Other current liabilities$9.0B
Current ratio0.93×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.74×stricter: inventory excluded
Cash ratio0.31×strictest: cash alone against what's due
Working capital($2.3B)the cushion left after near-term bills
Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. What it owes in the near term is money to suppliers and customers (payables and deferred revenue), not to lenders, so the balance sheet is funded by operating float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.
Debt due this year vs. cash$1.6B due · $10.7B cash
covered by cash on hand, no refinancing forced · both figures from the Jun 13, 2026 balance sheet
Revenue, latest quarter vs. a year ago+6.4%the freshest read on whether the business is still growing
Current ratio, recent quarters0.9× → 0.9×
Deeper floors
Tangible book value$1.8Bequity stripped of goodwill & intangibles
Net current asset value($57.1B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$47.8B$3.8B of it operating leases
From the company's latest filing.
How the cash was used, 2016–2025
Over the record, the business generated $110.8B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.
- Reinvested$42.8B · 39%
- Dividends$58.0B · 52%
- Buybacks$16.6B · 15%
- Returned to owners$74.6B
89% of the owner earnings the business produced over the span, $58.0B as dividends and $16.6B as buybacks.
- Source of funding−$6.6B
Reinvestment and shareholder returns ran $6.6B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $36.9B to $43.9B, and cash and short-term investments drew down $5.4B.
- Average price paid for buybacks—
Buybacks ran $16.6B over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count−5.6%
The diluted count fell from 1452M to 1370M, so the buybacks outran the stock issued to staff.
- Dividend record$5.56/sh
Paid in 10 of the years on record, the per-share dividend growing about 7% a year. It was never cut over the span.
- Return on what it retained—
Not read here: owner earnings are negative over the span, or the company returned nearly all its earnings rather than retaining them, so there is too little retained to measure a return on.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Chief executive | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|---|
| 2021 | Ramon L. Laguarta | $25.5M | $42.9M | $8.9B |
| 2022 | Ramon L. Laguarta | $28.4M | $39.5M | $8.0B |
| 2023 | Ramon L. Laguarta | $33.9M | $36.5M | $10.5B |
| 2024 | Ramon L. Laguarta | $28.8M | $12.9M | $9.3B |
| 2025 | Ramon L. Laguarta | $23.9M | $1.4M | $8.6B |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Stock-based compensation$288M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 3% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Inverting the record
Invert: instead of why PepsiCo Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.
3 of the 6 tests turned up something to look into; the other 3 came back clean.
- Look hereIs it less profitable than it was?10.3% vs 12.0%
The owner-earnings margin averaged 12.0% early in the record and 10.3% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
- Look hereDid receivables and inventory outpace sales?4% → 7% of sales
Receivables and inventory grew from $2.7B to $6.7B while revenue grew 54%: working capital is climbing faster than sales (4% of revenue then, 7% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.
- Look hereAre "one-time" charges a yearly habit?5 of 10 years
Management took an impairment or write-down in 5 of the last 10 years, $6.0B in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.
And these came back clean
- Did the share count rise anyway?
- Did debt outgrow the business?
- Did reported profit become cash?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Revenue recognition, Pension & retirement, Income taxes, Acquisitions as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Beverages
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| PEPPepsiCo Inc. | $93.9B | 55% | 14.2% | 18% | 11% |
| ADMArcher-Daniels-Midland Company | $80.3B | 7% | 3.5% | 8% | -2% |
| BGBunge Limited | $70.3B | 6% | 3.7% | 14% | -1% |
| TSNTyson Foods Inc. | $54.4B | 12% | 7.2% | 10% | 4% |
| KOCoca-Cola Co. | $47.9B | 61% | 26.0% | 16% | 21% |
| MDLZMondelez International Inc. | $38.5B | 39% | 13.9% | 7% | 10% |
| KDPKeurig Dr Pepper Inc. | $16.6B | 55% | 21.3% | 5% | 18% |
| STZConstellation Brands Inc. | $9.1B | 50% | 29.9% | 9% | 25% |
| Group median | — | 45% | 14.1% | 9% | 10% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what PepsiCo Inc. has delivered.
$
Through the cycle, PepsiCo Inc. earns about $10.4B on its 11.0% median owner-earnings margin. This year’s 9.2% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’21→’25+1%/yr
Owner-earnings growth · ’16→’25+0%/yr
Owner-earnings growth · ’16→’25+1%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Free cash flow $9.3B on 1365M shares outstanding, per the 10-Q cover, as of 2026-07-02; net debt $33.2B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($4.2B) runs well above depreciation ($3.6B), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $10.0B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "PepsiCo Inc. (PEP), the owner's record," https://ownerscorecard.com/c/PEP, data as of 2026-07-09.
Manual order: ← PENN its page in the Manual PFE →
Industry order: ← MNST the Beverages chapter PRMB →