Two Names Continue to Impress
In the second quarter, I recommended PepsiCo (PEP) and Zimmer Holdings (ZMH). Both companies recently reported better-than-expected earnings for that quarter, but their stocks followed very different trajectories. PepsiCo shares rallied to a recent high of $72.76, while Zimmer's share price declined a bit to $58.70 based on a modest revenue shortfall and some market-share loss in the U.S. I continue to like both names, with a particular emphasis on Zimmer in light of the stock's recent price decline.
PepsiCo is a leading consumer packaged goods manufacturer with iconic brands such as Pepsi, Frito-Lay and Quaker Oats. During the recent quarter, PepsiCo reported better-than-expected earnings of $1.12 per share vs. $1.09 consensus. Revenues were in-line driven by solid 1% unit volume gains and 4% price/mix benefits. Management affirmed the guidance for the year, even with the tough macro concerns across Europe. My high opinion is due to the company's stable revenue and earnings profile, topped-off by a high-dividend yield....513 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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