PepsiCo (PEP) Stock

Investors are probably curious about how much longer the bull market will last. Here are the reasons why five contributors from Fool.com strongly believe that Alphabet, Micron Technology, Brookfield Renewable, PepsiCo, and United Parcel Service are great stocks to invest in this month.

The soft drinks industry has opportunities for growth thanks to new ideas and digital changes, but it also deals with rising costs and supply chain issues. Major companies like KO, PEP, MNST, KDP, and COCO are considered good investment choices.

As 2025 begins, investors wanting to update their portfolios with some good-value companies may consider stocks that didn't perform well in 2024. Major beverage companies Coca-Cola (KO 0.37%) and PepsiCo (PEP 0.22%) have faced challenges over the last year, with both seeing a drop of about 14% from their highest points in the past 52 weeks.

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Coca-Cola (NYSE: KO) is a stock that you should consider buying when its price is fair and then keep for a long time. Currently, there may be a good chance to buy, as the stock price has dropped by 15% in the last year, with most of that decline happening in the last three months. Additionally, Coca-Cola has been a part of the S&P 500 for many years and is known as a Dividend King.

In the latest trading session, PepsiCo (PEP) finished at $152.81, showing a 1% increase compared to the day before.

PepsiCo's shares have recently reached their lowest point in a year, which could be a good chance for long-term investors who focus on dividends, even with current economic challenges and worries about inflation. The decline in stock price is linked to the Federal Reserve's updated expectations for interest rate cuts, affecting sectors like Pepsi. However, Pepsi's strong financial position, reliable dividend payments, and undervalued stock suggest that there could be significant growth once inflation levels off.

PepsiCo's high yield right now hints at a possible return to average levels, which could benefit investors despite recent worries about the business and the economy. The company's long-term stability, worldwide reach, and strong brand lineup make it a good investment choice, even with short-term challenges. Although there have been recent financial difficulties and lower growth expectations, Pepsi's valuation still looks appealing, especially when compared to its past P/E ratios and its competitor, Coca-Cola.

PepsiCo has reached its lowest point in a year, and although its steady dividend yield and profits are good signs, the market trends suggest it should be sold. I believe there are three possible scenarios for PEP: a gradual decline (45% chance), a quick drop (30%), or a small decrease (25%). The valuation of PEP's Yield At a Reasonable Price (YARP) is not appealing, as the high dividend yield points to increased risk, and the technical analysis indicates more potential losses ahead.