PepsiCo Inc.

VANGUARD GROWTH ETF $60.58 (New York symbol VUG; buy or sell through brokers) aims to track the MSCI U.S. Prime Market Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund has an MER of just 0.14%. The $21.0-billion fund’s top holdings are Apple Inc., IBM, Google, Coca-Cola, Microsoft, Philip Morris International, Oracle Corp., Schlumberger, Wal-Mart and PepsiCo. Vanguard Growth ETF is broken down by economic segment as follows: Information Technology (29.3%), Consumer Discretionary (17.0%), Consumer Staples (12.3%), Energy (10.9%), Industrials (11.1%), Health Care (10.9%), Financials (4.8%), Materials (4.5%), Telecommunication Services (0.7%) and Utilities (0.2%)....

Pennsylvania-based Vanguard Group is one of the world’s largest investment-management companies. The group manages over $1 trillion U.S. in 150 mutual funds. Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces. Canadians can, however, buy Vanguard exchange-traded funds (ETFs) that trade on stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys:...

These three beverage makers face rising ingredient costs. However, all three have restructured their operations, and the resulting savings have put them in a better position to face these challenges. As well, their strong brands will help them pass higher costs on to their customers. Moreover, all three are expanding in fast-growing overseas markets. PEPSICO INC. $69 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $110.4 billion; Price-to-sales ratio: 1.8; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) is the world’s second-largest soft-drink maker, after Coca-Cola. It also makes other products, such as Frito-Lay snack foods, Tropicana fruit juices and Quaker Oats. Last year, PepsiCo bought its two main bottling firms, Pepsi Bottling Group Inc. and PepsiAmericas Inc., for $7.8 billion in cash and shares. Starting in 2012, the company should save $550 million a year by merging plants and administrative functions....

Pennsylvania-based Vanguard Group is one of the world’s largest investment-management companies. The group manages over $1 trillion U.S. in 150 mutual funds. Vanguard, which went into business in 1975, offers low-fee index mutual funds. Generally speaking, Canadians can’t buy units of mutual funds that are registered in the U.S., because they aren’t registered with provincial securities commissions. For that matter, some Canadian funds aren’t available in all provinces. Canadians can, however, buy Vanguard exchange-traded funds (ETFs) that trade on U.S. stock exchanges. We don’t recommend all of Vanguard’s ETFs, but here are two we do see as low-fee buys:...

The stock market put on a huge rise from mid-2010 through February this year, and this left it ripe for a setback. Japan’s earthquake/tsunami/nuclear plant breakdown provided the trigger for that setback. Events in Japan have been horrific for the victims, of course. The Japanese situation could still weigh on the market for weeks or months to come. However, the damage to Japan is far too isolated and local to put the worldwide economic recovery at risk. World economic growth could slow temporarily while multi-national companies re-think their hiring and investment plans, and consumers re-think major purchases. After they complete their re-thinking, businesses and consumers may speed up their spending to make up for lost time. The outcome of Japan’s nuclear problems could have a big impact. If radiation leakage is widespread, it could spur much more environmental opposition to the nuclear industry. That could shift demand from nuclear to natural-gas power plants, particularly since shale gas discoveries and technology have vastly expanded natural gas reserves in North America and around the world. (One key beneficiary here would be our long-time favourite, Canadian gas producer Encana Corp.)...

PEPSICO INC. $63 (New York symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 1.6 billion; Market cap: $100.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.pepsico.com) saw its sales jump 33.8% in 2010, to $57.8 billion from $43.2 billion in 2009. That’s mainly because of its 2010 purchases of its two main soft-drink bottling firms, Pepsi Bottling Group Inc. and PepsiAmericas Inc., for $7.8 billion in cash and shares. Without merger-related costs, PepsiCo’s 2010 earnings rose 14.2%, to $6.7 billion from $5.8 billion in 2009. Earnings per share rose 11.3%, to $4.13 from $3.71, on more shares outstanding. Combining plants and administrative functions should save the company $550 million a year by the end of 2012. That’s up from its original target of $400 million. These savings should help PepsiCo offset higher prices for corn and other ingredients at its snack-food operations....

PEPSICO INC., $65.17, New York symbol PEP, continues to expand internationally. Right now, it gets 45% of its sales from outside the U.S. This week, the company agreed to buy Wimm-Bill-Dann Foods OJSC (New York symbol WBD). Wimm-Bill-Dann is a leading producer of dairy products, fruit juices and baby food in Russia. If Russian regulators approve, PepsiCo will pay $3.8 billion for 66% of Wimm-Bill-Dann. It will then offer to buy the remaining 34%. In all, PepsiCo will pay roughly $5.4 billion. To put this cost in context, the company earned $2.0 billion, or $1.22 a share, in the three months ended September 4, 2010. PepsiCo already has some operations in Russia, so combining plants and distribution networks should save it $100 million a year by 2014....

Heinz and Campbell Soup no doubt hope they have as much success expanding in China as Yum Brands and PepsiCo: YUM! BRANDS INC. $49 (New York symbol YUM; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 468.6 million; Market cap: $23.0 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.0%; WSSF Rating: Above Average) was the first fast-food company to enter China (in 1987). China now supplies 40% of Yum’s sales, and 45% of its earnings. Thanks to strong sales growth in China, Yum’s 2010 earnings should rise 15.2%, to $2.50 a share. The stock trades at 19.6 times that estimate....

ADOBE SYSTEMS INC., $26.99, Nasdaq symbol ADBE, jumped as high as $28.90 a share this week on reports that MICROSOFT CORP., $24.24, Nasdaq symbol MSFT, may launch a takeover offer for the company. A merger could help Microsoft compete in the fast-growing field of software for smartphones. Right now, Apple’s iPhone and phones powered by the free Android system, which is made by Internet-search provider Google Inc., dominate this market. Microsoft hopes to improve its market share with its upcoming Windows Phone 7 operating system. Adding Adobe’s Flash video software could give Windows Phone 7 an advantage over Apple and Android phones. As well, Adobe’s products could help Microsoft develop new software for touch-screen tablet computers....

VANGUARD GROWTH ETF $55.16 (New York symbol VUG; buy or sell through brokers) aims to track the MSCI U.S. Prime Market Growth Index, a broadly diversified index that mainly consists of stocks of large U.S. companies. The fund has an MER of just 0.14%. The $15.2-billion fund’s top holdings are Microsoft, IBM, Apple Inc., Cisco Systems, Wal-Mart Stores, Google Inc., Exxon Mobil, Oracle Corp., Philip Morris International and PepsiCo. Vanguard Growth ETF is broken down by economic segment as follows: Information Technologies (32.9%), Consumer Discretionary (14.3%), Consumer Staples (12.9%), Health Care (10.6%), Industrials (10.3%), Energy (8.1%), Financials (5.1%), Materials (4.6%), Telecommunication Services (0.9%) and Utilities (0.3%)....