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Compare Stocks › PEP vs UNP

PepsiCo, Inc. (PEP) vs Union Pacific Corporation (UNP): Which Is the Better Buy in 2026?

As of 2026-06-19, PEP is overvalued at $142, with a DCF intrinsic value of $82 and a margin of safety of -74%. UNP is overvalued at $257, with an intrinsic value of $224 and a margin of safety of -14%. Of the two, UNP has the wider margin of safety.

PEP
PepsiCo, Inc.
$142.02
VS
UNP
Union Pacific Corporation
$256.88

Rewards

PEP
  • ★PepsiCo, Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★PepsiCo, Inc. scores 88/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
  • ★Free cash flow has grown at a 11.0% CAGR over the past 4 years, demonstrating strong earnings power growth.
UNP
  • ★Union Pacific Corporation has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
  • ★Union Pacific Corporation scores 80/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
  • ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.

Risks

PEP
  • ⚠High leverage (1.95x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
UNP
  • ⚠Each dollar of retained earnings has produced only $0.15 of earning power — shareholders may have been better served by dividends.
  • ⚠PEG ratio of 3.27 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
  • ⚠High leverage (1.57x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.

Key Valuation Metrics

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PEP
UNP
Valuation
$8.75B
Free Cash Flow
$5.50B
4.51%
FCF Yield
3.61%
22.30
Trailing P/E
21.16
15.59
Forward P/E
18.75
Quality & Moat
17.22%
ROIC
15.46%
43.88%
ROE
40.69%
54.38%
Gross Margin
56.53%
1.57
PEG Ratio
3.27
Balance Sheet Safety
1.95
Net Debt / Equity
1.57
N/A
Interest Coverage
N/A
2.24
Net Debt / EBITDA
2.42
4.02%
Dividend Yield
2.12%
PEP: 8Ties: 2UNP: 2
PEPUNP

Historical Fundamentals

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PEP

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

UNP

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

$1 Retained Earnings Test

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PEP
$-9.83
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$5.34B
Δ Market Cap
$-52.53B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
UNP
$0.98
created per $1 retained over 3 years
Mediocre Allocator
Σ Retained
$10.64B
Δ Market Cap
+$10.42B
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

Discounted Cash Flow (DCF) Analysis

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PEP
73.7% Overvalued
Price is 73.7% above estimated fair value
Current Price: $142.02
Fair Value: $81.78
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
UNP
14.5% Overvalued
Price is 14.5% above estimated fair value
Current Price: $256.88
Fair Value: $224.43
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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PEP

What growth rate is the market pricing in at $142?

+12.6%
Market-Implied Owner Earnings Growth
Standard FCF implies +11.8%

The market implies +12.6% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +11.8%, reflecting heavy growth investment.

UNP

What growth rate is the market pricing in at $257?

+11.1%
Market-Implied Owner Earnings Growth
Standard FCF implies +14.6%

The market implies +11.1% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +14.6%, reflecting heavy growth investment.

Economic Moat Score

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PEP
88/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat with strength across all dimensions. Revenue Predictability is the standout factor.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
UNP
80/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by margin stability. Reinvestment Efficiency is the area most vulnerable to competitive pressure.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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PEP
-2.57
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
UNP
-2.61
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

M-Score Trend

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

Ownership Breakdown

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PEP
Insiders 0.2%Institutions 80.9%Retail & Other 18.9%
No. of Institutional Holders4,456
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
UNP
Insiders 0.1%Institutions 90.8%Retail & Other 9.1%
No. of Institutional Holders3,486
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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PEP
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises
UNP
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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PEP
0
Sells (3M)
1
Sells (12M)
Total value (12M): $4.68M
LAGUARTA RAMON L
Chief Executive Officer
$4.68M
@ $167.39 · 2026-03-02
GALLAGHER MARIE T
Officer
$3.99M
@ $159.55 · 2025-03-04
KRISHNAN RAMKUMAR
Chief Executive Officer
$1.50M
@ $150.97 · 2025-03-03
WILLIAMS STEVEN C
Officer
$2.71M
@ $150.89 · 2025-03-03
FLAVELL DAVID JAMES
General Counsel
$1.04M
@ $150.90 · 2025-03-03
LAGUARTA RAMON L
Chief Executive Officer
$7.74M
@ $154.90 · 2025-03-03
SANTILLI PAULA ALEJANDRA
Officer
$1.18M
@ $151.89 · 2025-02-27
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
UNP
3
Sells (3M)
4
Sells (12M)
Total value (12M): $9.25M
GEHRINGER ERIC J.
Officer
$789,504
@ $263.96 · 2026-06-03
ROCKER KENYATTA G.
Officer
$7.44M
@ $271.76 · 2026-04-24
HAMANN JENNIFER L
Chief Financial Officer
$549,400
@ $274.70 · 2026-04-24
GEHRINGER ERIC J.
Officer
$469,625
@ $234.93 · 2026-03-20
RICHARDSON CRAIG V
Officer
$1.64M
@ $252.00 · 2025-01-27
WHITED ELIZABETH F.
President
$1.88M
@ $250.00 · 2025-01-24
WHITED ELIZABETH F.
President
$875,905
@ $246.59 · 2024-07-30
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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PEP
FearGreed
😐Neutral(48/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
UNP
FearGreed
😐Neutral(54/100)

"Market is pricing this stock without strong emotion in either direction"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

⚖️ Buffett Signal

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PEP
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (48)
UNP
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Neutral (54)
View PEP Full AnalysisView UNP Full Analysis

Frequently Asked Questions: PEP vs UNP

Is PepsiCo, Inc. or Union Pacific Corporation more undervalued in 2026?▼

Based on our discounted cash flow model, UNP trades at a -14.5% margin of safety (intrinsic value $224 vs. price $257), compared to PEP's -73.7% margin of safety (intrinsic $82 vs. $142).

Which stock has a wider economic moat, PepsiCo, Inc. or Union Pacific Corporation?▼

PEP scores 88/100 (Wide moat), while UNP scores 80/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Which company has better free cash flow, PepsiCo, Inc. or Union Pacific Corporation?▼

PepsiCo, Inc. (PEP) generates a 4.5% free cash flow yield, compared to Union Pacific Corporation's 3.6%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.

Which stock has higher return on invested capital, PepsiCo, Inc. or Union Pacific Corporation?▼

PEP earns 17.2% ROIC versus UNP's 15.5%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

Which dividend is safer, PepsiCo, Inc.'s or Union Pacific Corporation's?▼

UNP's dividend earns a safety score of 94/100 (Very Safe), compared to PEP's 34/100 (Unsafe). UNP has raised its dividend for 3 consecutive years.