Latest news with #SieteFoods
Yahoo
26-05-2025
- Business
- Yahoo
PepsiCo officially buys Poppi for $1.95B. See which other Texas brands have been sold
A wave of recent acquisitions is reshaping the landscape of Texas's beloved food and restaurant industries, with iconic local brands and burgeoning startups catching the eye of national and international powerhouses. From a multi-billion-dollar beverage deal to the expansion of a Houston restaurant empire, these strategic moves highlight the growing value and appeal of Texas's culinary contributions. The trend underscores a desire by larger entities to tap into the flavors and customer loyalty cultivated by Texas-based businesses, while also signaling growth opportunities for the acquired companies. Austin-based Poppi, the rapidly growing prebiotic soda brand, officially completed its acquisition by PepsiCo on May 19. The deal, valued at $1.95 billion, brings the beverage into PepsiCo's vast portfolio. Poppi has carved a niche with its functional beverages, reflecting PepsiCo's push into the wellness drink market. In another significant move for PepsiCo in Texas, the global beverage and snack giant also completed its acquisition of Austin's Siete Foods in January. The deal was reported to be around $1.2 billion. Siete Foods, known for its health-conscious Mexican-American food products like grain-free tortillas and chips, further expands PepsiCo's natural and "better-for-you" food offerings. The iconic San Antonio-based fast-food chain, Whataburger, saw a major shift in ownership in June 2019. After nearly seven decades as a family-owned enterprise, a majority stake was acquired by BDT Capital Partners, LLC, a Chicago-based merchant bank. While the Dobson family retains a minority ownership and the headquarters remain in San Antonio, the acquisition aims to accelerate the brand's expansion into new markets while preserving its Texas heritage and core values. The Dallas-based "lodge-themed" sports bar chain, Twin Peaks, was acquired by Los Angeles-based FAT Brands in September 2021 for $300 million. FAT Brands added Twin Peaks to its growing portfolio of concepts, aiming to leverage its popular model for further expansion. San Antonio's Taco Cabana, a fixture in the Texas fast-casual scene, was sold in July 2021 for $85 million. The acquirer was Yadav Enterprises, a California-based franchisee with stakes in other well-known brands like Jack in the Box and Denny's. The sale by its previous parent company, Fiesta Restaurant Group, allowed Fiesta to sharpen its focus on its Pollo Tropical brand. Dallas-based Velvet Taco, a fast-casual concept celebrated for its taco creations, was acquired by private equity firm Leonard Green & Partners in November 2021. This acquisition positioned the popular chain for potential accelerated growth and expansion under new ownership. Austin's Torchy's Tacos saw an ownership shift in November 2020 through a substantial investment, reportedly around $400 million, from GenRock Capital Management, General Atlantic, and other investors. While not a full acquisition by a single corporate entity, this private equity infusion fundamentally altered ownership and control. In a colossal $18.7 billion mega-merger in July 2018, the Plano-based Dr Pepper Snapple Group joined forces with Keurig Green Mountain, creating the beverage giant Keurig Dr Pepper. While not a restaurant, this acquisition represented a monumental change for a massive Texas-based food and beverage company, uniting two major players in the North American beverage market. Houston's renowned Pappas Restaurants Inc., the empire behind popular eateries like Pappadeaux and Pappasito's Cantina, announced in May its intent to acquire the bankrupt Tex-Mex chain On The Border Mexican Grill & Cantina. This move is expected to expand Pappas Restaurants' footprint within the Tex-Mex casual dining segment, bringing the Dallas-area-based chain under the wing of a deeply established Texas hospitality group. This article originally appeared on Austin American-Statesman: From Poppi to Whataburger, here are 9 Texas brands that have been sold
Yahoo
27-01-2025
- Business
- Yahoo
3 Reasons to Buy PepsiCo Stock Like There's No Tomorrow
There are times on Wall Street when you just have to throw caution to the wind. Sure, Mr. Market may be downbeat on a stock, but that doesn't mean it is a bad investment. In fact, the contrarian move of buying when other investors are selling can lead you to strong long-term results, particularly if you focus on owning historically well-run companies. Which is why you won't want to wait until some tomorrow to start buying PepsiCo (NASDAQ: PEP) stock. Here are three reasons today is the day to buy. Shares of consumer staples giant PepsiCo have lost nearly a quarter of their value since early 2023. That's a pretty sizable drawdown for this company. But every time it has lost this much value, it has eventually bounced back to reach new highs. There's no guarantee that will happen again, of course, but the business hasn't fundamentally changed in any way since 2023. So there's no reason to believe it has suddenly become a bad company. However, there's an interesting aspect to this price drop. It has pushed the dividend yield up to around 3.6%, near the highest levels in the company's history. Dividend yield can be used as a rough gauge of valuation, and right now PepsiCo's yield is screaming that the stock is historically cheap. To back that up, the company's price-to-sales and price-to-earnings ratios, more traditional valuation metrics, are both below their five-year averages. As noted above, nothing material has changed about PepsiCo as a company since early 2023. In fact, the food maker has basically been running the same successful playbook for decades, which has translated into a very long history of success. That shows up, once again, with the dividend. PepsiCo is a Dividend King, one of a rarefied group of companies that have increased their dividends year in and year out for 50 consecutive years or longer. You don't build a record like that by accident; it requires high levels of execution in both good markets and bad ones. Think about the last 25 years, let alone the last 50. There was the dot-com bubble, the Great Recession, and the coronavirus pandemic, to highlight some of the worst periods. And PepsiCo did just fine in each case, growing its business and rewarding investors with larger dividends each year. In fact, despite the current business headwinds, management continues to invest for the future. It just bought Siete Foods, a diversified Mexican-American food company, and has agreed to buy the 50% of the Middle Eastern food specialist Sabra that it didn't already own. These aren't life-altering acquisitions, but they show that the company is continuing to push forward, which is exactly what investors should expect from a reliable business. These two acquisitions are relevant in another way: They show the diversity of PepsiCo's business. Siete makes everything from chips to packaged food items. Sabre makes dips, which could fall into the chips or packaged foods category. And the company's namesake product is a beverage, making it a major player in all three segments of the food sector. Many of its peers just operate in a single segment. What this means for investors is that PepsiCo is something of a one-stop shop in the consumer staples space if you are looking for a food company. And management has many different ways to grow its business over time. If one division is lagging, it can move resources to the other divisions. Moreover, it has three different niches within which to act as an industry consolidator. It's true that PepsiCo's financial results have been a bit underwhelming lately (which is why the stock is currently out of favor), but the company's highly successful history suggests that its performance will eventually turn higher again. In fact, the Siete and Sabra acquisitions show that management is already trying to lay the foundations for a brighter future. Add in a historically high dividend yield and PepsiCo's status as a Dividend King, and it is hard to see why a long-term dividend investor wouldn't want to buy the stock right now. Before you buy stock in PepsiCo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and PepsiCo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $874,051!* Now, it's worth noting Stock Advisor's total average return is 937% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list. Learn more » *Stock Advisor returns as of January 21, 2025 Reuben Gregg Brewer has positions in PepsiCo. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 3 Reasons to Buy PepsiCo Stock Like There's No Tomorrow was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
27-01-2025
- Business
- Yahoo
Pepsi Just Made a $1.2 Billion Acquisition of Something That Has Nothing to Do With Carbonated Beverages
After 10 years in business, the Garza family sold their company Siete Foods to PepsiCo (NASDAQ: PEP) for a cool $1.2 billion. The deal for Siete was announced back in October but closed this January. Pepsi is an enormous business, and for it $1.2 billion is relatively small. But any purchase over $1 billion is still noteworthy. The surprising thing for some investors may be that Siete Foods doesn't have a single beverage in its product portfolio, let alone any carbonated beverages. Rather, the company makes food products that cater toward people looking for grain-free and dairy-free options in Mexican-American food. The acquisition of Siete Foods dovetails nicely with Pepsi's November acquisitions of Sabra and Obela. Pepsi had already owned half of both joint ventures but moved to acquire the rest, bringing more food products into Pepsi's portfolio. If it's surprising to you that Pepsi is acquiring food companies, then it's likely that you don't understand Pepsi's business. In fact, food products are one of the best reasons to invest in the company today. Over the last 12 months, Pepsi has generated revenue of over $90 billion. But a relatively small percentage of this is attributable to beverage sales in North America. In the company's fiscal third quarter of 2024 (which ended in early September), the North American beverage division only accounted for 31% of the business. Nearly as big as beverages, 28% of Pepsi's Q3 revenue came from snacks and food in North American markets. The company generates the remainder of its sales from food and beverages in international markets. However, snacks and food in North America are the more important parts of Pepsi's business, because they're more profitable by a mile. The company's North American Frito-Lay division alone accounted for 39% of its total Q3 operating profit; in comparison, just 24% of operating profit came from the North American beverage unit. To drill down further, Pepsi's Quaker Foods division in North America is small at just 3% of the company's overall revenue in Q3. But again, it commands better profits. Quaker Foods in North America had a Q3 operating margin of 15%, compared with just an 8% margin for beverages in North America. Given the size of Pepsi's non-beverage portfolio and looking at the margins, it's not surprising that the company is doubling down with acquisitions such as Sabra and Siete Foods. It's good business. When it comes to investing in Pepsi stock, it's important to have realistic expectations. Over the last 10 years, Pepsi has averaged only a 7% annual gain, according to Macrotrends. Returns were positive, which counts for something -- but they weren't anything to write home about. These pedestrian returns for Pepsi stock were due to its similarly pedestrian rate of revenue growth. Being one of the biggest businesses in the world already, and in a low-growth industry, means that it's hard to grow fast. And growth is important for stock returns. That said, PepsiCo stock isn't without its merits. For starters, the company's diverse and beloved product portfolio makes it one of the safest businesses in the world, so investors can reasonably expect stable profits. And because its stock price went down in 2023 and 2024, it's now cheaper than usual. Pepsi's price-to-earnings (P/E) ratio of 22 is below its 10-year average P/E valuation of 26. And with a dividend yield of over 3.5%, the income potential has never been higher; that's significant because Pepsi is an ultrareliable Dividend King. Finally, Pepsi has generated 39% of its revenue from international markets through the first three quarters of 2024. As a whole, revenue in international markets is growing while it's declining in North America. Moreover, profits are improving in international markets with scale. Based on these trends, it's possible that profit growth outpaces revenue growth for Pepsi in the coming years, which would provide the stock with an added boost. Pepsi is acquiring food companies because food is a big part of the business, and provides better-margin revenue than carbonated beverages. The company may not post impressive growth numbers due to its size. But management is focusing on its better opportunities, the stock is cheap, and international growth could provide a boost as profitability improves. All that said, PepsiCo shares aren't my best pick for outperforming the S&P 500 over the next three to five years. But investors could do a lot worse than Pepsi. And the stock does have merit from the perspectives of both safety and dividends, which could be important in making a decision. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $369,816!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,191!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $527,206!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of January 21, 2025 Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Pepsi Just Made a $1.2 Billion Acquisition of Something That Has Nothing to Do With Carbonated Beverages was originally published by The Motley Fool Sign in to access your portfolio
