UBS Sees PEP as a Buy-Worthy Defensive Play

PepsiCo Inc. (NASDAQ:PEP) is one of the best stocks for a retirement stock portfolio.

The stock made it to UBS’s list as a strong defensive investment. Its shares have dropped nearly 15% so far in 2025, but the stock offers a dividend yield of 4.4%.

A close up of a glass of a refreshing carbonated beverage illustrating the company’s different beverages.

While most analysts rate PepsiCo Inc. (NASDAQ:PEP) as a Hold, the average price targets suggest nearly 15% potential upside from its current trading level, according to LSEG data.

In May, PepsiCo Inc. (NASDAQ:PEP) increased its quarterly dividend by 5% to $1.4225 per share compared to the previous year. The company has consistently paid dividends since 1965 and celebrated its 53rd straight annual dividend increase this year.

Recently, PepsiCo Inc. (NASDAQ:PEP) has been expanding its portfolio, completing the $1.95 billion acquisition of probiotic soda brand Poppi last month, which includes $300 million in expected cash tax benefits.

PepsiCo Inc. (NASDAQ:PEP) is a leading global company in the food and beverage industry, involved in the production, marketing, and distribution of a broad variety of products. It is widely recognized for popular brands such as Pepsi, Lay’s, Doritos, Gatorade, and Quaker. The company’s operations span both the beverage and food sectors, with a presence in more than 200 countries and territories around the world.

While we acknowledge the potential of PEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure. None.