GETTING STARTED Build a Strong Stock Portfolio Earnings: The Bottom Line Ten Clues to Strong Stocks Four Questions to Ask Before You Buy A Kid-Friendly Introduction to Stocks MORE... STOCK TOOLS Kiplinger's Stock Finder Test your risk tolerance What is the current yield from dividends? Which are better: income or growth stocks? Pick the Best 'Bankerage' Company Recent Columns Hilton: Rooms to Grow - Feb. 4, 2005 PepsiCo: Blue-Chip Carbs - Feb. 3, 2005 Google: On the Fast Track - Feb. 2, 2005 Sprint: What's Next(el)? - Feb. 1, 2005 Bank of America: Earning Interest - Jan. 31, 2005 Home Depot: Building on Success - Jan. 28, 2005 MORE ... STOCKS TO WATCH E-MAIL   Sign Up   Now you can have Stocks to Watch delivered to your inbox every day. Sign up now.

STOCKS TO WATCH

PepsiCo: Blue-Chip Carbs

With the Atkins diet appearing to be losing steam, companies that sell carb-rich food may be ready for a comeback.

But if you want to take advantage of Americans' return to carbs, it's important to be discriminating. Companies such as American Italian Pasta and Krispy Kreme Doughnuts offer carbs to spare. But those two companies have other problems that a change in diet won't cure.

Carb-craving investors should focus instead on stronger companies, such as PepsiCo (PEP).

In addition to selling soft drinks, PepsiCo owns two major carb providers, Quaker Oats and Frito-Lay. The company, which derives well over half of its sales from food, is known for innovative products and packaging -- such as single servings of Quaker Oatmeal in microwaveable containers and baked snack foods from Frito-Lay.

PepsiCo had some good news for Wall Street on Thursday, announcing fourth-quarter earnings of 58 cents per share that met analysts' expectations.

The company said all of its businesses performed well, with total revenue up 9%.

Analysts at Prudential, which rate the stock "overweight," said PepsiCo enjoyed a "high-quality" quarter.

At $54, or about 21 times projected 2005 earnings of $2.56 per share, PepsiCo's stock isn't cheap. But it's a good bet that this company will stay a step ahead of diet fads.

PepsiCo Click for larger chart Today's quote Use Stock Finder to make your own stock picks Last closing price: $62.08 200-day moving av.: $55 3-yr. annual return: 2% Trailing 12 mo. P/E: 19 Forward P/E: 16 Price-to-book ratio: 6 Price-to-sales ratio: 14.20 5-yr earnings growth: 8% PEG ratio: 0.00 More