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- Dividend Increases You NEED To Know + PEP Stock Analysis + NVDA Stock Analysis
Dividend Increases You NEED To Know + PEP Stock Analysis + NVDA Stock Analysis
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Happy Monday! We have a great week of investing ahead…
I’ll cover the following topics:
Why You Should Own Pepsi in 2025 & Beyond - PEP Stock Analysis
6 New Dividend Increases You NEED To Know
Should You Own Nvidia in 2025 & Beyond? - NVDA Stock Analysis
Let’s do this!
The Key Story
Why You Should Own Pepsi in 2025 & Beyond - PEP Stock Analysis
PepsiCo (PEP) is one of the most dominant food and beverage companies globally, owning iconic brands like Pepsi, Mountain Dew, Gatorade, Doritos, and Lay's. You'll find a PepsiCo product in nearly every grocery and convenience store.
PepsiCo is a Dividend King, boasting over 50 years of consecutive annual dividend increases. If you had invested in PepsiCo stock in 1990 and reinvested the dividends, your total return would be over 3,300%.
But is PepsiCo still a good stock to buy today?
The stock price has fallen over 17% from its 2023 high, making it one of the highest starting dividend yields for PepsiCo in the past decade at 3.35%. The forward P/E ratio is also one of the lowest in the past decade, which could signal potential value.
In my latest analysis, I delve into PepsiCo's history, business model, and financials. I examine their Q3 earnings summary and provide an updated intrinsic value calculation using discounted cash flow.
After evaluating the data, I believe PepsiCo is a great business trading at a fair price. For dividend investors seeking reliable and growing income, PepsiCo could be a solid addition to your portfolio.
However, if you're focused solely on total return over the coming decades, PepsiCo might underperform compared to other options due to its mature business model & lower growth rates.
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Dividend News
6 Dividend Increases You NEED To Know
$BF-A - Brown-Forman declares $0.2265/share quarterly dividend, 4% increase from prior dividend of $0.2178.
$LZB - La-Z-Boy declares $0.22/share quarterly dividend, 10% increase from prior dividend of $0.20.
$RGLD - Royal Gold declares $0.45/share quarterly dividend, 12.5% increase from prior dividend of $0.40.
$MRK - Merck declares $0.81/share quarterly dividend, 5.2% increase from prior dividend of $0.77.
$NKE - Nike declares $0.40/share quarterly dividend, 8.1% increase from prior dividend of $0.37.
$MSI - Motorola Solutions declares $1.09/share quarterly dividend, 11.2% increase from prior dividend of $0.98.
Stock Analysis
Should You Own Nvidia in 2025 & Beyond? - NVDA Stock Analysis
Value investors often overlook Nvidia stock, and some even claim it's a bubble.
However, I think it's a mistake to outright dismiss Nvidia and the entire AI wave behind it. Nvidia is not all hype; it's a real business with real profits. Just in the last quarter, Nvidia generated $16.8 billion in free cash flow.
The growth of this company has been nothing short of insane. Yes, the stock price has boomed over the past two years, but it's a mistake to think that's divorced from the business reality. Nvidia has seen massive earnings growth in that time and is expected to continue growing.
That said, I don't necessarily think Nvidia is a buy at the current price, and I don't personally own the stock. Today, I'm offering an unbiased analysis of the company, including a look at their latest quarter and earnings call. I'll explain the key factors driving their growth, present both the bull and bear cases for Nvidia stock, and ultimately provide my own discounted cash flow valuation.
Nvidia's impressive margins and explosive growth are largely driven by their Data Center business, which has grown from $3.8 billion to $30.7 billion in quarterly revenue over the past two years.
However, it's important to remember that Nvidia's revenue and profits are someone else's infrastructure costs. Their biggest customers are big tech companies like Microsoft, Amazon, and Google. If these companies don't see returns on their AI investments in the next few years, they may reduce spending, which poses a risk to Nvidia.
I conclude that while Nvidia isn't a bubble and has real strengths, the current risk-reward ratio doesn't compel me to invest at this time.
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— Zach
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