PepsiCo Inc.

A: Vanguard Dividend Appreciation ETF, $85.68, symbol VIG on New York (Units outstanding: 33.7 million; Market cap: $2.2 billion; www.vanguard.com), aims to track the Nasdaq Dividend Achievers Select Index....

PLEASE NOTE: Our next Hotline will go out on Friday, July 8, 2016.

HECLA MINING CO., $5.10, symbol HL on New York, explores for, mines and processes silver and gold in the U.S., Canada and Mexico.

In 2012, the company paid $3.2 million for a 19.9% stake in Dolly Varden Silver Corp., $0.65, symbol DV on Toronto....

BOEING CO., $108.63, New York symbol BA, fell 11% this week on news that the U.S. Securities and Exchange Commission is investigating how the company accounts for the development costs of its 747 and 787 jet airliners. Accounting rules let Boeing spread the huge upfront costs of designing and building new planes over several years, instead of recognizing these outlays when they occur. The SEC is looking into Boeing’s estimate of these costs, as well as its projected aircraft sales. If the company has to change these estimates, that could take it longer to recoup its development costs....

PEPSICO INC. $92 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $138.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) has suffered lately as a more health-conscious population consumes fewer soft drinks. Sales of its low-calorie sodas have also fallen on concerns over the long-term health effects of the artificial sweetener aspartame. In 2014, total U.S. diet soda sales declined 5.9%. In response, PepsiCo has replaced the aspartame in Diet Pepsi with Splenda, a low-calorie sweetener made from regular sugar. The switch will likely boost sales, as the company has launched a new marketing campaign and promotions that will likely encourage consumers to try the new drink. Even so, PepsiCo’s overall sales will likely stay weak for the rest of 2015. PepsiCo is a hold....

PEPSICO INC. $92 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $138.0 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) has suffered lately as a more health-conscious population consumes fewer soft drinks. Sales of its low-calorie sodas have also fallen on concerns over the long-term health effects of the artificial sweetener aspartame. In 2014, total U.S. diet soda sales declined 5.9%.

In response, PepsiCo has replaced the aspartame in Diet Pepsi with Splenda, a low-calorie sweetener made from regular sugar. The switch will likely boost sales, as the company has launched a new marketing campaign and promotions that will likely encourage consumers to try the new drink. Even so, PepsiCo’s overall sales will likely stay weak for the rest of 2015.

PepsiCo is a hold.
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MICROSOFT CORP., $44.61, Nasdaq symbol MSFT, paid $9.5 billion for Nokia’s mobile phone operations in April 2014. If you exclude the cash this business held, the purchase price was $8.0 billion. Nokia is the only major phone maker using Microsoft’s Windows Phone software. Microsoft believed this purchase would help it sell more of its phones and encourage developers to write more apps for the platform. However, sales of Windows Phone devices continue to suffer in the face of intense competition from the iPhone and Android-powered devices. Smartphones running Windows account for just 3% of global sales....

PEPSICO INC. $95 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $142.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) earned $1.25 billion in the three months ended March 21, 2015, down 1.6% from $1.27 billion a year earlier. The company spent $1.1 billion on share buybacks in the latest quarter. As a result, earnings per share were unchanged at $0.83. Sales declined 3.2%, to $12.2 billion from $12.6 billion. If you exclude businesses PepsiCo bought and sold in the past year, as well as unfavourable currency exchange rates (overseas markets supply 40% of the company’s sales), revenue rose 4.4%. PepsiCo is still seeing strong demand for its snack foods, particularly in developing countries. However, soft drink sales have suffered as increasingly health-conscious consumers drink less soda....

PEPSICO INC. $95 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $142.5 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) earned $1.25 billion in the three months ended March 21, 2015, down 1.6% from $1.27 billion a year earlier. The company spent $1.1 billion on share buybacks in the latest quarter. As a result, earnings per share were unchanged at $0.83.

Sales declined 3.2%, to $12.2 billion from $12.6 billion. If you exclude businesses PepsiCo bought and sold in the past year, as well as unfavourable currency exchange rates (overseas markets supply 40% of the company’s sales), revenue rose 4.4%.

PepsiCo is still seeing strong demand for its snack foods, particularly in developing countries. However, soft drink sales have suffered as increasingly health-conscious consumers drink less soda.

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HONDA MOTOR CO. LTD. ADRs $35 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $63.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.honda.com) is spending $61 million to increase capacity at its plant in Tapukara, India, by 50%, to 180,000 cars a year. The company expects to complete these upgrades in 2016. Honda’s other Indian facility makes 120,000 cars a year. The extra capacity will help Honda take advantage of rising car demand in the country: in the 11 months ended February 28, 2015, it sold 166,366 cars in India, up 43.5% from the same period a year earlier. At the same time, Honda plans to produce 39% more motorcycles in India by 2016. This expansion will cost the company $94.3 million....

PEPSICO INC. $97 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.5 billion; Market cap: $145.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www. pepsico.com) has replaced rival Coca-Cola (New York symbol KO) as the official soft drink sponsor of the National Basketball Association.

Coca-Cola still has marketing deals with some NBA teams and players, but this new multi-year agreement will let PepsiCo promote a wider range of products, such as Gatorade sports drinks and Frito-Lay snack foods, on NBA television broadcasts and other league events.

PepsiCo is a hold.

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