Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is PepsiCo, Inc. (NYSE:PEP), and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.
Some see PepsiCo, Inc. (NYSE:PEP) only as an also-ran in the soft-drink market, perennially lagging behind The Coca-Cola Company (NYSE:KO). But even though Coke has the No. 1 brand in the world and a much bigger presence in the pure beverage market, PepsiCo, Inc. (NYSE:PEP)’s snack-foods division gives it a vital source of diversification and growth that fits extremely well with its extensive distribution network. Let’s take a closer look at PepsiCo, Inc. (NYSE:PEP) to see whether it can sustain its long streak of rewarding dividend payouts to investors.
Dividend Stats on PepsiCo
| Current Quarterly Dividend Per Share | $0.5375 |
| Current Yield | 2.7% |
| Number of Consecutive Years With Dividend Increases | 41 years |
| Payout Ratio | 54% |
| Last Increase | May 2012 |
Source: Yahoo! Finance. Last increase refers to ex-dividend date.
Has PepsiCo been perking investors up lately?
PepsiCo isn’t just a dividend giant; it also stands as one of the 25 best companies in America, with its dedication to workers, customers, and shareholders. A key driver for PepsiCo, Inc. (NYSE:PEP)’s status among the nation’s industry leaders is its strategic vision, with CEO Indra Nooyi having been early to realize that trends toward greater awareness of health and nutrition would give PepsiCo, Inc. (NYSE:PEP) an opportunity as an early adopter of healthier products. In light of the concerns about obesity and diabetes that have hit PepsiCo, Coke, and other players in the soft-drink industry, Nooyi’s foresight has proven invaluable in giving the company a head start on diversifying its product base, and responding proactively to changing demand.
In addition, PepsiCo has realized the importance of having an image as an innovative company. A big marketing push on its core brands helped boost sales substantially during the fourth quarter of 2012, and the company has positioned its new Kickstart sparkling caffeinated juice blend to go up against Monster Beverage Corp (NASDAQ:MNST) and other big players in the energy-drink space. Expanding geographically has also been a key source of growth for Pepsi, with success in Russia and ongoing plans to bolster its presence in China and India representing important strategic moves for the company.
