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5 Stocks That Should Join the Dow

Kraft, Alcoa and HPQ all could be in line for the heave-ho

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Pepsico (NYSE:PEP)Alcoa and HPQ could get the boot, sure, but if the Dow decides to shake things up, Kraft is going to be the impetus. And if the giant food company were to fall out of the Dow Jones Industrial Average, why not sub in … another food company?

In this case, PepsiCo (NYSE:PEP) — the nation’s largest food and beverage business — seems like a logical fit.

Should Kraft take a post-split bow, the Dow Jones would be left with just one firm — McDonald’s (NYSE:MCD) — that deals in food. Coca-Cola (NYSE:KO) is beverages only, and Procter & Gamble (NYSE:PG) stepped out of the game for good earlier this year when it sold off its Pringles brand to Kellogg (NYSE:K).

You’re telling me America’s benchmark index should be just 3% grounded in food? Grub’s all we do anymore, guys.

PepsiCo is an American institution that is known from coast to coast — and although it’s constantly stretching its oversea-legs, PEP’s fortunes still heavily depend on what’s going on in the U.S. At 47 years old, PepsiCo is plenty established, its $110 billion market cap is very much in line with the Dow average of about $128.5 billion, and its $70 stock price won’t ruffle many feathers.

The only downside: You’re replacing a company that was food pyramid-friendly with one that keeps Wilford Brimley in the ad-acting business — and I don’t mean for Quaker Oats.

Kyle Woodley, InvestorPlace Assistant Editor

Article printed from InvestorPlace Media,

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