Jim Cramer on Pepsi: "You Let That Dividend Compound Over Time"

PepsiCo, Inc. (NASDAQ:PEP) is one of the stocks Jim Cramer shared insights on. Cramer called it a “premier growth company” and said:

“I know PepsiCo’s never going to be up 100 points in one day, but if you’re building a diversified portfolio of mostly growth stocks, as you should, you can do a lot worse than owning a premier growth company like PepsiCo. And by the way, it still is a premier growth company. Why PepsiCo? First and most cogent, Elliott Management just took a $4 billion stake in PEP. And this activist hedge fund wants change… You got a $142 stock here that traded at 196 two and a half years ago, and it now, because it’s fallen so much, yields almost 4%.

Do you know it used to trade at a premium to Coca-Cola, the most revered consumer packaged goods stock? Now it trades at a big discount. Why can’t it go back to a premium someday?… You buy a stock like PepsiCo, you let that dividend compound over time, and you’re going to make a ton of money. Sure, it won’t be immediate, but you’re buying the stock at what amounts to be a historic discount with lots of levers to pull, and they will be pulled as long as Elliott’s in there pulling with you.”

PepsiCo, Inc. (NASDAQ:PEP) produces and markets beverages and convenient foods and provides snacks, cereals, dairy, and drinks.

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Disclosure: None. This article is originally published at Insider Monkey.