Diversification makes Pepsi a 'buy'


I've owned PepsiCo Inc. shares for some time. What do you see as their future prospects?

- K.C., via the Internet

Diversification gives the No. 2 soft-drink maker an edge over No. 1 Coke. Its Frito-Lay North America division accounts for roughly half of revenues on the continent. PepsiCo will launch Ben & Jerry's refrigerated milkshakes this summer.

Shares of PepsiCo (PEP) are up 2 percent this year, after gains of 13 percent last year and 12 percent in 2004. Net income rose 12 percent in its most recent quarter.

Consensus analyst rating on PepsiCo is a solid "buy," according to Thomson Financial.

Andrew Leckey writes for Tribune Media Services.

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