we don't care coca-cola might be at 55, or pepsico might be 65, we care it sells 14 times earnings.n ingredient in that sauce, growth. how much bigger the earnings will be next year than they were this year and the year after that and year after that and so on. the stocks of companies with faster growth tend to get rewarded why? the multiple is about what we're willing to pay for earnings. and the more rapidly a business grows the bigger its futures earnings will be. so let's take one. say chipotle sells for 24 times earnings. that doesn't make it more expensive than a slow but steady grower like pepsico at 14 times earnings. chipotle deserves the bigger multiple much higher growth rate, 24% say versus pepsico's 8% now here's where it gets interesting. multiples aren't static and different markets people pay more or less. when they pay more multiple expansion and when they pay less multiple contraction. two more terms that sound much more complicated than they are. that's what hedge funds are trying to game when they play a sector rotation. they don't want to be in earnings contract

for more, we take you "inside pepsico." it is all that, and a bag of chips. is more to pepsico than pepsi. it has 22 brands, each pulling in $1 billion in sales per year.

there is more to pepsico than pepsi.s 22 brands, each pulling in $1 billion in sales per year. it started with brant stre

there is more to pepsico than pepsi.s 22 brands, each pulling in $1 billion in sales per year. it started with brant street. in 1940, pepsi made history with the first-ever national advertisemt

there is more to pepsico than pepsi.nds, each pulling in $1 billion in sales per year. it started with brant street. in 1940, pepsi made history with the first-ever national advertisement to have a jingle.

billion, bankrupt twice in the 20th century, the company merged with frito lay in 1965 and became pepsicong brands like 7-up. gatorade and tropicana. it drove pepsi's market past coke for the first time and remains there today. >> let's turn to caroline levy for her play by play on the two. she is the managing director after cfl america. so caroline, sticking with this sports lingo, you're saying on the field pepsi out-runs, out-scores coke. tell us the key reason why? >> well, really it is not because coke is not the stronger player in beverages, they definitely are particularly on a global stage. coke and pepsi are more neck and neck in the u.s., but coke is the clear winner in beverages, however, more than half of the earnings come from snacks, from a stock perspective we find pepsi more interesting. >> do you think it may ultimately be split into various divisions of food and beverage? >> i actually did, in 2009 we urged that it should split. and now we have them really trying to make it happen. i think analysts for many years have felt as i do that companies will do one thing extreme

general mills, pepsico and the hershey company all get 2% of total sales from china. it may not sound like much, but in a world where growth is hard to come by, that could hurt the overall numbers and performance. at least in the short term. longer term, the outlook still looks bright. >> if you looked at the most recent cpi report for may, for example, the cost of getting the plumber to come into your home in china is going up 7.3% in year ago terms. so that's a considerable rate of increase in wages for middle-skilled workers in china. and that should was through into higher consumer spending for mass market goods. >> reporter: china is the world's second largest economy, and its consumer considered the holy grail for businesses around the world. that's why they have been pouring in recent years into the country with the hope of fast growth and big spending. but for now, it could prove to be a headache, and a headwind in next quarter earnings reports. luckily, economists say it is just temporary. for "nightly business report," i'm sara eisen. >>> traffic snarled in

before joining directv, he was the ceo and vice chairman of pepsico international from 2003 through 2009. prior to that, he served as president and ceo of frito-lay's and asianafrican, division. -- middle east division. , he wasoining pepsico the senior vice president and general manager for avon products. he worked as a management consultant before that. he holds a masters degree from johns hopkins university and a bachelors degree from boston college. lieberman is a. graduate of johns hopkins. fordhite is also a foundation fellow at leningrad state university in st. petersburg, russia. constituents are very loyal customers. our next witness, we are glad to stephensonr. randall , the chairman, president of at&t. let me say this. at&t is one of the world's largest telecommunication companies. note that over the past six years, at&t has invested more capital into the united states economy than any other public than $140d more billion invested in wireless operations combined. that is erected to be proud of. i commend you for that. , he servedcoming ceo as the chief financial officer at at&

ofwas also the chairman pepsico international from 2003 through 2009. prior to that, he served as president and ceo of frito-lay's european, african, and asian division. -- middle east division. before joining pepsico, he was the senior vice president and general manager for avon products. he worked as a management consultant before that. he holds a masters degree from johns hopkins university and a bachelors degree from boston college. we also have mr. lieberman is a graduate of johns hopkins. mr. white is also a ford foundation fellow at leningrad state university in st. petersburg, russia. many of my constituents are very loyal customers. our next witness, we are glad to have you, mr. randall stephenson, the chairman, president of at&t. let me say this. at&t is one of the world's largest telecommunication companies. i note that over the past six years, at&t has invested more capital into the united states economy than any other public company and more than $140 billion invested in wireless operations combined. that is erected to be proud of. -- a rec

pepsico trading at all-time high. simon, goes back to 1965. pepsi pepsico's merger to frito-lay.to what we've been seeing every day. consumer staple strength there. >> that's it for us in our hour. have a great weekend. we'll hand it over to the "squawk alley" team. >> what a day shaping up. dow is up 45 now. 1962 on the s&p. it is 8:00 a.m. at apple headquarters in cupertino, california. 11:00 a.m. here on lawsuit. "squawk alley" is liv ♪ >>> welcome to "squawk alley." joining us this morning, editor at lashed a mashable. good to have you back. kayla tou, jon ford as we wrap up what's been an amazing week in tech. new details on apple's new smart wash. reuter is says production is going to start in july with

it represents companies like conagra, domino's pizza, general mills, craft, pepsico, coca-cola, sara association collected nearly $7 billion from those processed food companies in 2012. >> i think it's important to note, reverend, that many of the former presidents of that very association have said they support the better nutrition standards. and so there really has been a lot of turmoil in that group. and i don't think they really represent the bulk of people feeding our kids around the country. it's just good for the schools, it's good for the kids. there's no reason forward-thinking schools can't make the more nutritious standards. >> you know, a new report out today, karen, points out something very interesting. it says, quote, the school nutrition association has switched to a strategy of lobbying congress rather than the usda to weaken school food standards. i mean, is that what we are seeing more opposition? is that why we are seeing the congress more willing to block these measures, karen? >> absolutely. big food is big money here in washington, d.c. so absolutely. they are

before joining pepsico mr. white was senior management and consultant for avon products. and also worked for arthur anderson and company. mr. white holds a masters degree in international relations from johns hopkins university and a bachelor's degree from boston college. we also have mr. leeberman as a graduate of johns hopkins. mr. white is a ford foundation fellow from st. petersburg, russia. i say on a personal nature, many of my constituents are very loyal customers of direct. our next witness is -- we're glad to have you -- mr. stephens and mr. randall stephenson is chairman, ceo, and president of at&t. mr. stephenson, let me say this. at&t is one of the world's largest telecommunications companies are merely $129 billion in revenues last year. i note that over the past six years, at&t hais invested more capitol into the united states economy than any other public company and more than $140 billion invested in wireless and spectrum wireless operations combined. that's a the record be proud of and i commend you on that. prior to becoming ceo he served as at&t's senio

and he also had mon democratic olis which he wanted pepsico to buy. both stocks are up. other ideas proved disappoi disappointing, lost out with his expectations of a toyota comeback. instead that auto stock has fallen about 11%. other aspects of his japanese car maker theme did only slightly better with fuji heavy flat at this point, and mazda up about 7%. to be fair some of those ideas may yet need room to run, and whether it's right for the portfolio is depending on the goals, the amount of capital and so on. they do get paid very handsomely to make these picks. >> kate kelly, thanks very much. >>> and delivering alpha, on cnbc, just a month ago. if you'd like to sign up and attend, go to deliveringalpha.com. >>> weighing in on the housing market today. diana olick has the data. >> a better than expected jump in homebuilder sentiment despite still lackluster sales and starts in april, so maybe a sign that may numbers coming in next week could be stronger. builder confidence -- up to a 49 on -- this after barely moving since february. 50 is the line between positive an

they locked the pepsico company on. they like to keep an interested stake in what is a french industrial prized asset. there is simple reasoning for that. that's not hear from francois heard thatout having alstom have agreed with ge on this. this is what he had to say. decided, because i was a major issue for the french government, that the state would enter into alstom's capital. that is the subject of the discussions at the moment. this is a major condition, so that the government accepts the alliance which has been struck between general electric and alstom. >> he has what wanted, again, a of 29 percent in alstom. they're going to sell 20% of the french government. the french government therefore have two names on the board in this deal. >> thank you so much for that. let's check in on markets this morning. new zealand, this is how it looks right now. it is flat on the start of the day. it is fractionally green, but really no move there. spot iszealand dollar moving slightly up it is at -- up. it is at 0.8 seven cent

before joining directv, he was the ceo and vice chairman of pepsico international from 2003 through 2009ior to that, he served as president and ceo of frito-lay's and asianafrican, division. --dl

pepsico doing a tremendous job. nelson peltz is quite off his mark on that one.wever, the research does suggest, some very good search, i have to admit from up at harvard, in the big picture of things, activist investors aren't necessarily a bad force in the economy. many individual cases, i think dan lobe has done a great job. we'll have ralph whitworth with us. we'll have frank lake of the home depot who has worked well and meg whitman. you can have constructive partnerships. >> let me come back to you on leadership. relating actually to the chinese. since the chinese have taken over your company, how has it changed from a management perspective? >> really not much at all, andrew. what the chinese allowed us to do when they bought the company memorial day of 2012 was really invest back in the business. we had a strategy. we were somewhat capital constrained after seven, eight, nine years of private equity ownership. what they did is provide us the runway to let some of the ideas that are now coming to fruition really bloom. and it's worked really well. they gav

the search i think indicated and is showing these are companies like ge, pepsico, xerox, procter & gamble, high quality, very global companies. that sort of screen out to the top of the index. it's the top 400 brand name, very global companies. >> you know, it strikes me that you might be able to find companies and put them in but what happens, do these companies get kicked out if they have a turnover in management? >> oh, sure. of course. that's one component to it. because there are -- i want to be very clear, there are a lot of good companies run by men, becky. as i said, its percent after senior management and boards are the primary targets. >> what is a percent after senior management that qualifies you as being high? >> for the fund on average, it's 31% women as a percent of the board, 24% senior management as compared to an 11% global average overall. triple and double the percent that are there. >> wow. >> if the research holds these are companies that should offer a fair return to investors. >> if you look at those companies, if you had invested in them over the last five years o