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Pepsi, Kraft Might Not Be Meme Stocks But They Offer 'Slow And Steady Growth'

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Pepsi, Kraft Might Not Be Meme Stocks But They Offer 'Slow And Steady Growth'

Several food and beverage companies reported earnings on Thursday and despite a somewhat boring reputation in the "meme stock" generation, a name like PepsiCo, Inc. (NASDAQ: PEP) offers "slow and steady growth," according to Boris Schlossberg, managing director of FX strategy at BK Asset Management.

The Case For PepsiCo: Shares of PepsiCo fell about 2% after reporting a strong fourth quarter report in which management confirmed the company is on track to meet its long-term goals. Investors may want to take advantage of the stock's weakness as it is one of a few companies that offer long-term high-single-digit growth rates.

"Although the stock is down a little bit today off earnings, it's a stock that has essentially doubled in the last decade, and I think it has every chance of doubling in the next decade," Schlossberg said on CNBC.

PepsiCo's growth prospects stem from its ability to continue executing on what works today. The company can leverage its "tremendous dominance" in salty snacks in regions like Asia that will experience a boom in middle-class growth.

Related Link: What's On The Beyond Meat And PepsiCo Menu?

The Case For Kraft Heinz: Food giant Kraft Heinz Co (NASDAQ: KHC) is similarly positioned to grow over the many years ahead, Schlossberg said. Backed by a cleaner and more agile business and free cash flow generation of more than $5 billion, shares have "every chance" to return back to the $50 per share level that was last seen in 2018.

"The key thing with all of these stocks is that you're buying them for very steady, slow growth and dividend capture," he said.

PEP Price Action: PepsiCo stock is at $134.19 a share.

KHC Price Action: Kraft Heinz stock is at $35.55 a share.  

(Photo: Kraft Heinz Co)

 

Related Articles (PEP + KHC)

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Posted-In: beverages BK Asset Management Boris SchlossbergAnalyst Color Long Ideas Analyst Ratings Media Trading Ideas Best of Benzinga

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