I've had me eye on PEP for a little bit and I'm (mostly) liking what I see. It's trading at a 25% discount from it's ATH ($196 v $146) and has a considerably lower P/E than it's rival Coca Cola (KO) - (20.93 v 29.38) while arguably showing better growth (based on net income over 12 months). Additionally, it has a nice juicy dividend yield (3.7%).
On paper, it seems a fairly safe buy however my main concern is the tariffs China has put on US goods. PEP apparently derives 6% of its operating income from the Asian Pacific market and while there are no exact figures for just China I think its safe to say it will be the bulk.
Now, of course that 6% is hardly a material risk, but when a huge multi-global misses targets even a little bit it can have a very painful impact on the stock price. My concern is a loss of 6% is significant enough that even at current prices it's not a smart pick.
However, I am unsure and have somewhat limited knowledge of the company and its Asian operations even if there might be some exemption from China for food/beverages. As such, I thought I would put it to the board. Any thoughts?