PepsiCo vs Walmart Which Is Superior?

PepsiCo and Walmart are two major players in the global consumer market, with both companies holding significant influence in the retail and food and beverage industries. The stocks of PepsiCo and Walmart have been closely followed by investors due to their steady growth and resilience in the face of economic challenges. This comparison explores the performance and potential of both stocks, highlighting key factors that impact their value and attractiveness to investors.

PepsiCo or Walmart?

When comparing PepsiCo and Walmart, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between PepsiCo and Walmart.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. PepsiCo has a dividend yield of 3.4%, while Walmart has a dividend yield of 0.66%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. PepsiCo reports a 5-year dividend growth of 6.63% year and a payout ratio of 75.99%. On the other hand, Walmart reports a 5-year dividend growth of 1.85% year and a payout ratio of 33.23%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with PepsiCo P/E ratio at 23.00 and Walmart's P/E ratio at 38.79. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. PepsiCo P/B ratio is 11.06 while Walmart's P/B ratio is 8.66.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, PepsiCo has seen a 5-year revenue growth of 0.45%, while Walmart's is 0.34%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with PepsiCo's ROE at 48.96% and Walmart's ROE at 23.31%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $156.26 for PepsiCo and $94.50 for Walmart. Over the past year, PepsiCo's prices ranged from $155.85 to $183.41, with a yearly change of 17.68%. Walmart's prices fluctuated between $50.21 and $96.18, with a yearly change of 91.54%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.