Decades of Dividends

If you’re looking for a growing, dividend-paying investment, consider shares of PepsiCo (Nasdaq: PEP) — a beverage and snack giant that can perform well in good and bad economic environments. Its offerings are available in more than 200 countries and territories, and its brands include big names such as Pepsi, Lays, Mountain Dew, Doritos, Gatorade, Tropicana, Quaker Oats, Aquafina, Cheetos, Tostitos and Fritos, along with SodaStream, Near East, Naked, Smartfood, Life and Sabra. A whopping 22 of its brands generate more than $1 billion in sales each year.

PepsiCo has evolved by launching lower-calorie and sugarless sodas; non-carbonated beverages such as water, juice and tea; and healthier versions of Frito-Lay and Quaker products. Its scale and distribution advantages mean that it can supply products around the globe more efficiently than most of its rivals, and its offerings tend to get preferential placement in shops and grocery stores.

With a forward-looking price-toearnings (P/E) ratio recently near 23, PepsiCo’s stock isn’t exactly cheap, but it’s not outrageously overpriced, either. The stock offers a dividend that recently yielded 2.8%, too. Even better, that payout has been rising over time, at an average annual rate of 7.9% over the past five years. And that’s a rather reliable dividend, as PepsiCo has paid it quarterly since 1965, upping the dividend annually for 47 years.