PepsiCo offers a 2.9% dividend yield, has increased its dividend for 44 straight years, and has potential to deliver mid-to-high-single digit dividend growth going forward.
Carbonated soft drinks are now less than 25% of sales, and PepsiCo’s large and growing snack business is a key competitive advantage (and a differentiator compared to Coca-Cola).
PepsiCo’s stock offers reasonable value for long-term dividend investors today considering its business quality. In addition to safe dividend income, the stock could deliver double-digit total returns.
PepsiCo (NYSE:PEP) is one of the best dividend growth stocks in the market and a core holding in our Top 20 Dividend Stocks portfolio.
The company has paid dividends for more than 50 years while rewarding shareholders with 44 consecutive dividend increases, making it a member of the exclusive dividend aristocrats list, which can be seen here.
Sporting an above-average dividend yield and solid long-term earnings growth potential, PepsiCo is a dividend growth machine that income investors should familiarize themselves with.
Let’s take a closer look at PepsiCo’s business and why it is such a special dividend stock.
PepsiCo incorporated in 1919 and is a leading global convenience food and beverage company with about $63 billion in revenue. Snacks account for 53% of revenue, with beverages making up the remaining 47% of sales. Carbonated soft drinks account for less than 25% of total sales.
Some of PepsiCo’s most iconic brands are Lay’s, Pepsi, Tropicana, Quaker Oats, Gatorade, Naked Juice, Aquafina, Lipton, Doritos, Tostitos, Mountain Dew, Ruffles, Cheetos, and Sierra Mist. Twenty two of PepsiCo’s brands generate over $1 billion in annual sales.
By geography, 69% of revenue is derived from developed markets (U.S. 56%), while developing and emerging markets account for the other 31% of sales. PepsiCo is a very global business with operations in more than 200 countries. The company should benefit from growing consumer wealth and consumption around the world.
Fuente: Seeking Alpha
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