Jim Cramer advises investors to use a "top-down" approach, recommends PepsiCo (PEP) due to falling oil prices and 4% dividend yield
On Wednesday's broadcast of CNBC's "Mad Money," Jim Cramer urged investors to start with the broader economic outlook and interest rates, then identify sectors positioned to benefit, before selecting individual companies. He highlighted PepsiCo (PEP) as a stock that fits this strategy, noting it benefits from falling oil prices (which increase consumer disposable income for snacks and beverages) and offers a reliable 4% dividend yield. Cramer also pointed out PepsiCo's valuation at about 16 times projected 2027 earnings, which he considers cheap, with shares recently trading near $140, significantly below its 52-week high of $171.48. Additionally, activist investor Elliott Investment Management built a $4 billion stake in PepsiCo and reached an agreement in December 2025 to streamline operations, including reducing product count and cutting snack prices. PepsiCo's Q2 net revenue rose 6.4
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