The business behind the dividend
| Measure | PEP | Median | Formula |
|---|---|---|---|
| Return on equity | 40.4% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 16.5% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $7.28bn | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $7.67bn | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 12.2% | 15.0% | Operating income ÷ revenue |
| Net margin | 8.8% | 10.2% | Net income ÷ revenue |
| Debt to equity | 2.41x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | 10.26x | 4.43x | Operating income ÷ interest expense |
| Current ratio | 0.85x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | — | — | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 1.47x | 1.78x | Operating cash flow ÷ net income |
Not computed here: Long-term debt to working capital — why a blank is not a zero.
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 40.4% | 53.1% | 49.0% | 52.0% | 47.5% | 52.9% | 49.5% | 86.2% | 44.0% | 56.3% | 49.5% |
| Return on capital employed | 16.5% | 20.7% | 19.1% | 20.5% | 19.8% | 17.5% | 22.0% | 21.6% | 20.4% | 20.3% | 20.3% |
| Operating margin | 12.2% | 14.0% | 13.1% | 13.3% | 14.0% | 14.3% | 15.3% | 15.6% | 16.2% | 15.6% | 14.0% |
| Net margin | 8.8% | 10.4% | 9.9% | 10.3% | 9.6% | 10.1% | 10.9% | 19.4% | 7.6% | 10.1% | 10.1% |
| Debt to equity | 2.41x | 2.46x | 2.38x | 2.28x | 2.51x | 3.28x | 2.17x | 2.23x | 3.56x | 3.29x | 2.41x |
| Current ratio | 0.85x | 0.82x | 0.85x | 0.80x | 0.83x | 0.98x | 0.86x | 0.99x | 1.51x | 1.25x | 0.85x |
| Cash conversion | 1.47x | 1.31x | 1.48x | 1.21x | 1.52x | 1.49x | 1.32x | 0.75x | 2.07x | 1.68x | 1.47x |
How it compares in consumer staples
Among the 38 consumer staples companies here measured on free cash flow, Pepsico pays out less than 5 of them. The median for that group is 65.1%, against this company’s 99.6%.
Closest on free cash flow
- General Mills (GIS) 80.9%
- Keurig Dr Pepper (KDP) 83.1%
- Kenvue (KVUE) 91.8%
- Kimberly Clark (KMB) 101.3%
Same sector and same denominator, so the figures are comparable. All 43 in consumer staples →