PEP

The second stock on my 52-week low list is PepsiCo, whose ticker symbol is PEP. It is a dividend king, meaning it has been consistently increasing its annual dividend for more than 50 years.

They have a portfolio of many great top brands and are currently trading at historic discounts. The stock has fallen 15% in the last 5 years and 8.4% in the last year. It is currently near its 52-week low.

This is exactly what PepsiCo does, which I consider, in my opinion, the best option for investment in this market. It has an attractive valuation, but it is more diversified, pays much larger dividends, and has grown over a longer period.

PepsiCo stock fell to a 52-week low of $133 this week. Its future- based dividend yield stands at 4.43%. This is the highest yield since 2007, and since PepsiCo has been increasing its dividend for over 50 consecutive years and is known as the Dividend King, I was curious, when was the last time PepsiCo's dividend yield was this high?

Now, we come to Pepsi stock, a stock that I'm starting to wonder if people are tired of me talking about. Why? Well, I get tons of requests to cover Pepsi stock. I keep seeing online how it's an incredible opportunity because the starting yield is one of the highest it's been really in the last 5 to even 10 years.

On top of this, the valuation multiple is the lowest it's been in 10 years. However, I've been talking bad about Pepsi for really the last 3 to four years. In fact, I wrote an article on Seeking Alpha over a year ago titled Buy or Beware.

The warning signs are there. And Pepsi has not done well over the last year or over the last 5 years.

PepsiCo is another undervalued stock that is not linked to artificial intelligence. The fair value I calculated for PepsiCo is $177, and given the current market price of $140, I calculated a 27% upside for Pepsi over the next 12 to 18 months.

This is a rare low valuation for a relatively safe company with stable sales and profits. Of course, one of the most optimistic factors, and the thing that makes me most optimistic about PepsiCo, is its own experience.

This is a business that is difficult to manage. You have to work with distributors, you have to work with suppliers, you have to deal with manufacturing, you have to be very good at marketing, and you have to bring all of that together on a large scale around the world.

This is a difficult thing to do. PepsiCo has been successful in managing this for decades and has demonstrated skill in this regard for decades with continuous improvements. That exclusive knowledge and experience is one of the main reasons for my optimism about PepsiCo stock and one of the reasons why it is rare to find this stock at a low price.

PepsiCo's management team reiterated its long-term guidance for its ability to generate 4% revenue growth. However, near-term headwinds are impacting the company. Consumers are driving less frequently and visiting gas stations less often, and that's hurting PepsiCo sales at the convenience store and gas station channel.