Guests Ryne Williams and Harris Elliott discuss unexpected dividend stocks, including the discovery of Santitas tortilla chips as a product of PepsiCo. They also delve into their recent investment activities, the risks of options trading, and the value of time in pursuing goals.
PepsiCo's diversification into healthier products and its profitable Frito-Lay division contribute to its market dominance and attractiveness as an investment option.
The podcast highlights the potential gains and risks of selling covered calls in options trading, emphasizing the importance of rational thinking and caution to prevent emotional decision-making.
Deep dives
PepsiCo: A Diverse and Profitable Enterprise
PepsiCo, known for its beverages, is more than just a soda company. With diverse brands such as Frito-Lay, Gatorade, Quaker, and many more under its umbrella, PepsiCo has become a leading player in the food and beverage industry. While some may think PepsiCo is solely focused on sugary drinks, they have been leaning towards healthier products like low or no-sugar options, plant-based alternatives, and energy drinks. This diversification allows PepsiCo to cater to changing consumer trends and maintain its market dominance. Additionally, PepsiCo's Frito-Lay division, which includes brands like Doritos and Lay's, stands out as its most profitable division, making up 44% of the company's operating profit in 2022. These factors, combined with PepsiCo's long history of increasing dividends, make it an attractive investment option.
Navigating the Risks and Rewards of Options
The podcast episode explores the concept of options trading, with a specific focus on covered calls. The host discusses their personal experience selling covered calls on NextStar Media stock, highlighting the potential gains and risks involved in options trading. While options can offer immediate income through premiums received, they also limit the upside potential of the stock by setting a price cap. The host emphasizes the importance of being aware of emotions and avoiding greed when engaging in options trading. They highlight the need for rational and logical thinking, as emotions can cloud judgment and impact decision-making. Overall, the episode serves as a reminder to approach options trading with caution and consider its potential impact on long-term investment goals.
Santitas: An Unexpected PepsiCo Brand
During a casual family dinner, the host discovers Santitas tortilla chips, a brand previously unknown to them. Intrigued, they explore the background of this product and find that it is actually a PepsiCo brand. This revelation leads to a discussion of PepsiCo's extensive portfolio, with over 60 brands spanning various food and beverage categories. From snacks like Cheetos and Doritos to beverages like Gatorade and Lipton tea, PepsiCo has established itself as a market leader in many sectors. The host reflects on the challenges of competing with PepsiCo's diverse lineup and highlights the company's emphasis on innovation and healthier product offerings. Additionally, they mention PepsiCo's consistent dividend increases and express their own regret for not buying more shares when the stock price was lower. Overall, this unexpected encounter with Santitas chips provides insight into the reach and impact of PepsiCo as a formidable presence in the industry.
In this dividend investing episode, we have a fun story about how dividend stocks can unexpectedly pop up at the most random times and a chat about the ups and downs of covered call options - shared in our latest FREE newsletter.
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