6. Pepsi (PEP)
Company profile: Pepsi makes carbonated and non-carbonated beverages and a wide variety of snacks foods. Snacks make up 50% of revenue. Its brands include: Pepsi, Mountain Dew, Gatorade, Tropicana, Lay's, Doritos and Quaker.
Investor takeaway: Pepsi's shares are down 3% this year, but have a three-year annualized return of 10.8%. It's held by nine funds and has a three-year expected annualized return of 14%. The stock carries a 3.2% dividend yield.
Pepsi is trading at a relative valuation discount versus its historic norms. Morningstar analysts say that the company is cheap at its current price because "even though Pepsi still has significant growth opportunities, the forward price/earnings ratio of 14.1 is well below its 18 times projected earnings."
Pepsi said late last week that it plans to cut its workforce by 3%, or 8,700 jobs as a cost-cutting measure even as it reported fourth-quarter earnings rose 3.7%, to 89 cents per share. It also plans to raise its dividend by 4% and initiate a $3 billion share repurchase program.