Top 100 stock PepsiCo, Inc. (PEP) hikes dividend by 7%

PepsiCo’s (NYSE:PEP) dividend was increased by 7%.  Its overall yield is 2.85%. The firm started paying a dividend in 1972.

PepsiCo is a large comglomerate beverage company. Its products include Doritos, Tostitos, Lays, and Cheetos cheese-flavored snacks, branded dips.  As well as Quaker oatmeal, grits, granola, and Aunt Jemima mixes and syrups.  Its Beverages segment offers Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, Tropicana Pure Premium, and tea and coffee, and juices. The company was founded in 1898 and is headquartered in Purchase, New York.

PepsiCo has maintained a three-year growth rate of dividends of 7.8 percent. PepsiCo currently ranks 3rd in dividend yield within the large cap consumer goods, processed & packaged foods category. The quarterly dividend for the June payment will be $0.805 versus the prior year rate of $0.753 per share. PepsiCo is a member of our Top 100 Dividend Stocks.  (see below).

top-100

The dividend will be paid at the new higher rate on June 30, 2017, to shareholders of record at close of business on June 2, 2017. PepsiCo Inc. is currently priced at $112.91. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
6/2/2017 0.805
3/1/2017 0.753
11/30/2016 0.753
8/31/2016 0.753
6/1/2016 0.753
3/2/2016 0.703
12/2/2015 0.703
9/2/2015 0.703
6/3/2015 0.703
3/4/2015 0.655
12/3/2014 0.655
9/3/2014 0.655
6/4/2014 0.655
3/5/2014 0.568
12/4/2013 0.568
9/4/2013 0.568
6/5/2013 0.568
2/27/2013 0.537
12/5/2012 0.537
9/5/2012 0.538
5/30/2012 0.538
2/29/2012 0.515
11/30/2011 0.515
8/31/2011 0.515
6/1/2011 0.515
3/2/2011 0.48
12/1/2010 0.48
9/1/2010 0.48
6/2/2010 0.48
3/3/2010 0.45

Analysis of PepsiCo is based upon our five key criteria for the Top 100 list, which include;

Category Value Score
Dividend Yield 2.85% 204
Dividend Growth (3-7 year avg) 7.7 360
Forward P/E 20.53 351
S&P Financial Rating A+ 232
Beta 0.75 61
Total Score 1,208
% Yield 3 Year Div. Growth Rate 7 Year Div. Growth Rate SPS 2017 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr low Yield % 5 yr max Yield %
2.85% 7.8 7.7 45.55 2.45 1.6 3.2 2.44% 3.11%

Positives;

  • PepsiCo maintains an investment grade rating of A+.
  • PepsiCo’s current dividend yield (2.85%) is above its five-year average historical dividend yield.
  • PepsiCo maintains a beta of 0.75, lower than the average company.
  • PepsiCo’s dividend yield is above that of the S&P 500 Index.
  • PepsiCo has paid out a dividend consecutively for the past 45 years.

Negatives;

  • PepsiCo is trading just above its ten-year average price/sales (P/S) ratio.

 

2016 2015 2014 2013 2012
Earnings per Share 4.85 4.66 4.27 4.37 3.92
Annual Dividend 2.96 2.79 2.53 2.24 2.13
Payout Ratio 61.03% 59.87% 59.25% 51.26% 54.34%
Earnings per Share 2017 (projected) 5.1
Dividend 3.17
Payout Ratio 62.16%

Based on the firm’s financial credit rating, consistent dividend growth and low beta, PepsiCo Inc. qualifies as one of our Top 100 Dividend Stocks

PepsiCo Inc. Dividend Yield Chart (Click to enlarge)

Chart Explanation:  Dividend growth stocks may be viewed undervalued when the current yield is above historical readings for the past 5 years. 

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