PepsiCo is a good investment because it is a well managed company with strong sales in a large market that is both diverse and world wide. PepsiCo continues to innovate and penetrate new markets (for example the flavored water market), and is not losing market share to competitors. PepsiCo is a safe investment because there will always be a demand for Pepsi's products, even during recessions, and therefore the stock will be resistant to cyclical changes in the market and economy. The dividend does not provide huge amounts of income, but it is a nice cushion.
PepsiCo's income statement shows that 2006 Net Income was significantly higher than both 2004 and 2005 (35% and 38%). One of the key factors that account for this growth is between 2004 and 2005 cost of sales (or cost of goods sold)only increased by 12% and by only 11% between 2005 and 2006. Selling, General & Administrative Expense increased only 4% between 2005 and 2006 while revenues increased by 8% meaning that revenues......
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