Analyzing The 10 Year Stock Performance Of P&G And Pepsico

Analyzing the 10 year Stock Performance of P&G and PepsiCo

This report will examine the stock performance of PepsiCo and P&G over the past ten years and the factors that lead to this performance.

Preliminary Conclusions and Recommendations

Proctor & Gamble continue a lagging trend approach to continued long term success. This company holds on to one of the most diversified portfolios in their industry. They boast a product line that exceeds 250 different items. This company that has survived since the 1830's has walked through every historical financial calamity that the United States has suffered in the last 150 years. They have suffered some instability at the leadership level but have managed to remain competitive. There is substantial information leading the investor to believe that there will be significant downsizing in the near future. They have had some ups and downs in the market this year and in years past but as the visuals indicate they are swinging towards an upward trend. How far up remains to be seen (Procter & Gamble Co., 2007) P&G has allowed their company to get caught up in slow moving, and conservative ways. This held them back from expanding their products into other areas and countries. This has also kept them from taking advantage of modern tools like the Internet, to better market their products (Procter & Gamble, n.d.).

On the face it would appear that the trend favors PepsiCo, they have had an exceptional year in the market primarily predicated on their recent ventures in both the domestic and global markets. They have successfully diversified their product line in recent years and have been able to pass their competitors in the area of variety especially in their efforts to pass their major competitor Coca Cola. In addition the current leadership (Executive body) for Peps Cola has been in place and working together long enough at the helm to propel PepsiCo into the clear leader in their industry (Murry, B .PepsiCo, Inc, 2007). The Pepsi Company is well known for its diversity. Black Enterprise Magazine's has even recognized it for being one of the "Ð''40 Best Companies for Diversity'". The have been so dedicated to spreading diversity that they established Diversity@work and promotes it on their web site. Besides their involvement with diversity they are also one of the largest contributors to the community. Over the past several years Pepsi has begun to market many products that are healthier for the consumer. Their snack foods now have zero or reduced trans fats. Even their market of drinks with zero or less sugar has become strong. Another way they have shown consumers their commitment to good heath is by teaming with Cooper Concepts Inc. (CCI) "to promote nutrition, fitness and wellness." They also published Health and Wellness Philosophy on their web site. These types of things appeal to today's consumers. (PepsiCo's History Timeline, 1965-2007).

Recommendations

It appears that PepsiCo may have the slight edge for future investment growth. Some market analysts agree that PepsiCo may dominant their industry for years to come. On the other hand recent internal problems have given investors pause for thought as it pertains to Proctor & Gamble. Recent news that indicates they will be downsizing with a significant number of jobs lost is a reason for concern. I would recommend buying PepsiCo stock. This recommendation is based on the fact that P&G has an unstable corporate structure, their stock has an unstable history. There has been some controversy with the companies testing methods. PepsiCo stock has remained stable over the past ten years and they have shown a steady growth and they have good consumer relations.

In an effort to support the conclusions and recommendations this team will analyze information on the year stock performance of PepsiCo and P&G. This information will be further reviewed for reliability and to ensure the numbers are correct.

Visuals

P&G Stock

This chart provides the Financial Summary from 2002 thru 2006 for Proctor & Gamble.

Source Proctor & Gamble visual and information retrieved on September 15, 2007 from: https://secure.wilink.com/asp/YAH1_order_complete_ENG.asp?session_ID=EC61B47B9B0344B5

Source Investing Stock Information and Stock Charts. (2007, September 8). Retrieved on September 8, 2007, from http://www.pginvestor.com/phoenix.zhtml?c=104574&p=irol-stockquotechart&control_javaupperindicator=&control_javauf=&control_javatype=&control_javascale=&control_javanumberperiods=&control_javamovingaverage=&control_javalowerindicator2=&control_javalowerindicator1=&control_javachartfunctions=&control_javaapplet=&control_yearlistbox=&control_monthlistbox=&control_daylistbox

This is the stock chart for P&G for the past ten years. The stock went from $33.38 in 1997 to $67.46 a share today (Investing Stock Information and Stock Charts, 2007, September 13).

Date Requested 09/13/07

Closing Price $67.460

Source Investing Stock Information and Stock Charts. (2007, September 14). Retrieved on September 8, 2007, from http://www.pginvestor.com/phoenix.zhtml?c=104574&p=irol-stockquotechart&control_javaupperindicator=&control_javauf=&control_javatype=&control_javascale=&control_javanumberperiods=&control_javamovingaverage=&control_javalowerindicator2=&control_javalowerindicator1=&control_javachartfunctions=&control_javaapplet=&control_yearlistbox=&control_monthlistbox=&contrl_daylistbox

PepsiCo Stock

The chart below shows the growth of PepsiCo from Oct. 06 to Sept. 07.

Source PepsiCo Financial visuals retrieved on September 15, 2007, from:

http://finance.yahoo.com/q/bc?t=1y&s=PEP&l=on&z=m&q=l&c=proctor

This visual provides information on projected earning estimates through December 2008. As you can see the picture is very optimistic for increased earnings.

In-Depth Earnings Estimates

Current Quarter

Sep