The Pepsico dividend is not flashy. It’s not grabbing the big headlines. You’re not going to confuse it with pop stars like Camilla Cabello or Shawn Mendes walking down a red carpet, paparazzi cameras blinding.
But what it is, is dependable. Reliable. Steady.
You can count on it for sustained and consistent excellence.
And that’s worth a heck of a lot in the world of dividend investing.
Is PepsiCo right for your stock portfolio? Perhaps.
But before we try to answer that question, let’s dive into what makes PepsiCo’s dividend so special.
All About PepsiCo Inc.
Most likely when you think about PepsiCo Inc. you think about its sugary sweet cola beverage and its famed rivalry with Coca-Cola.
But there’s much more to the company than that. In fact, food and beverage company PepsiCo is broken up into six distinct business units:
North American Beverage (NAB)
Frito-Lay North America (FLNA)
Quaker Foods North America (QFNA)
Europe Sub-Saharan Africa
Asia, Middle East and North Africa
The North American Beverage group includes, of course, its flagship drink Pepsi, but also other non-alcoholic beverage brands such as Tropicana, Mountain Dew, and Gatorade.
The NAB group is the company’s biggest division by sales with a $21.1 billion total revenue haul in 2018 – an increase of 1% over 2017.
Although NAB is the largest division by revenue, it’s not the leading profit center. Instead, Frito-Lay North America, with its lip-smacking salty brands like Doritos, Lays, and Fritos, has been a godsend for the firm.
In fact, operating profit in 2018 had a growth rate of 4% contributing to a total of 9% growth over the last two years. The growth stems from both productivity savings as well as revenue increases.
No thanks to me – I’m trying to cut my salty snack intake, to be honest.
Growth in the international markets divisions have also been strong. That’s thanks to a growing worldwide middle class eager to consume everything from a cold sugary glass of Pepsi to a hearty breakfast of Quaker Oatmeal.
PepsiCo Stock Today.
Over the last six months, PepsiCo’s stock has grown from $116.59 on March 11 to $136.36 as of closing on Wednesday, September 11th. So, it’s certainly not the least expensive stock on the market.
On September 19th, PepsiCo reached an all-time high stock price of $139.18 helped by the overall strength of the market. Its current Earnings per share (EPS) is $9.03.
The stock currently has a market capitalization of about $193.1 billion and trades at an average volume of about 4.3 million shares.
In terms of valuation, the average PE ratio of the market has historically been about 15. While the S&P currently sports a PE ratio of about 22, Pepsi trades down at about 15 right now.
In fact, its pricing is right around fair market value. So a buyer wouldn’t be taking advantage of any glaring inefficiency in the stock price.
But we’re not looking at PepsiCo to take advantage of crazy growth or attractive capital gains.
We’re in it for the quarterly dividend. So let’s …read more
Source:: Investment You