Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, March 19, 2010

Article Excerpt

PEPSICO INC., $66.56, New York symbol PEP, rose 2% this week after the company raised its dividend and announced a new share buyback plan. PepsiCo’s new quarterly dividend is $0.48 a share. That’s up 6.7% from $0.45. The new annual rate of $1.92 yields 2.9%. The company also plans to buy back up to $15 billion of its common shares over the next three years. That’s equal to 14% of its $104.5-billion market cap. PepsiCo recently completed a $7.8-billion purchase of its two main bottling firms, Pepsi Bottling Group Inc. and PepsiAmericas, Inc. The company paid part of the purchase price in cash, and issued new shares to pay the rest. PepsiCo’s share buybacks should help offset some of the dilution caused by the extra shares. As well, consolidating plants and administrative functions should save the company $400 million a year, starting in 2012. These savings will help pay for the share buyback plan. PepsiCo is a buy. LIMITED BRANDS INC., $24.67, New York…