小羊是MUNI (Municipal Bond地方政府債)的愛好者，事實上這是上班族的投資好朋友，因為股息不扣稅，所以比其他蠻多etf或股票的稅後殖利率高。例如每月1號左右除息的HYMB和HYD殖利率分別是接近4%和4.1%，每月20號過後除息的PZA則是2.8%，除息後幾天股息就會入帳了，確切payout date每個月都會公佈喔。好處是政府債倒債風險小，etf價格也不太會隨著股市震盪，可以做到保本和跑贏通膨。唯一要注意closed end fund的價值比較容易波動，建議可以避免closed end fund的etf。
The Coca-Cola Co (KO) and PepsiCo, Inc. (PEP) both announced 2019 first quarter earning reports recently. Let’s take a quick look about the performance of these two soft drink companies in the first quarter.
1.PEP price went up
To be honest, PEP share price has risen a lot during the past year and its diversified products brought good revenue performance. On the contrary, KO share price had limited upward movement during the last 12 months. Actually Coca-Cola’s Q1 2019 financial result was very nice, even better than Pepsi’s numbers, in terms of income growth rate, operating profit growth rate, EPS growth rate, operating profit margin, and profit margin.
2.Organic revenue growth rate
However, after the earnings report, PEP shares were more favored by investors, mainly because Pepsi’s organic revenue had a strong 5% growth, better than estimate. Investors should be aware that the so-called Organic Revenue is a non-GAAP metric. GAAP, Generally Accepted Accounting Principles, are accounting principles accepted by SEC (US Securities and Exchange Commission regulations). GAAP provides guidance about how revenue, expense and other expenses should be recognized. Although non-GAAP metric can be misleading sometime while it is an indicator that the company believes that it can reflect the company’s operation more accurately. Both Coca-Cola and PepsiCo announced their organic revenue, but the methodology used could be different. Therefore, comparing the company’s current period organic revenue and prior period one will be more appropriate than looking the organic revenue itself as long as the company did not change its calculation methodology between periods.
During the past quarter, Pepsi bought back $3 billion of treasury stocks, while Coca-Cola bought back only $243 millions of its stock. This could be one of the reasons made Pepsi’s share price rose as its number of outstanding shares decreased. I don’t think we should overinterpret the motivation for Pepsi to repurchase its stocks. PepsiCo described $3 billion in treasury stocks and $5 billion cash dividends during the past quarter as returns to shareholders in its earnings report. Stock buyback is considered as a more flexible way to returned to shareholders comparing with issuance of cash dividends when a company is doing well.
4.Does PEP really have a lower P/E ratio?
Investors should also pay attention to P/E ratio. Pepsi’s P/E is around 14 and Coca-Cola’s is 30 now. However, based on both companies’ Q1 2019 financial result and earning estimate over next three quarters in 2019, you will find that both companies’ forward P/E of 2019 (estimated PE ratio) are around 22.23. People might feel Pepsi’s share price is cheaper if they look at current P/E, but might come to a different conclusion with forward P/E.