PepsiCo (PEP 0.12%) has a 44-year history of paying dividends, with its payout currently yielding 3.2%. That streak puts it in the realm of Dividend Aristocrats and within sight of becoming a Dividend King.

The three stocks below don't necessarily have as long a record of paying dividends to investors as Pepsi does, but BP (BP 0.08%), KLA-Tencor (KLAC 0.71%), and Target (TGT -0.62%) offer richer payouts with better growth prospects.

Boy drinking bottle of soda

Drink in these three dividend opportunities. Image source: Getty Images.

Twice the fun (and then some)

John Bromels (BP): Sure, Pepsi's current yield of about 2.9% is pretty good. British oil and gas giant BP's, though, is currently more than twice as high, at nearly 6%. You might want to stop reading right there, but it's always a good idea to make sure that a high yield isn't a sign of a troubled company. Luckily, that doesn't seem to be the case for BP.

Thanks in large part to rising oil prices, BP's net earnings have skyrocketed over the past year. On a trailing-12-month basis, they're up more than 150%. Its recently released third-quarter earnings were also impressive, with revenue up 32.9% and net earnings up 93.2% versus the prior-year quarter. Certainly, BP's entire industry benefited in Q3 from high oil prices, but not all of them can boast a yield of almost 6%.

BP is doing so well, in fact, that it announced a change in the way it's going to pay for its major acquisition of BHP Billiton's onshore U.S. shale assets that will benefit its investors. Initially, BP had planned to pay for the assets with a mix of cash from other asset sales and issuing new shares. However, BP is now so flush with cash that it plans to pay BHP Billiton entirely with the cash it's generating from its operations. Although it will still go through with the asset sales, it will use the $5 billion to $6 billion those sales generate to reduce debt. More importantly, it no longer plans to issue new equity to fund part of the sale, which is a win for current investors, whose shares won't be diluted.

BP is a company at the top of its game, and its healthy dividend yield reflects that. Now looks like a great time for income investors to consider buying shares.  

Matches Pepsi's dividend powers to a much better investment thesis

Anders Bylund (KLA-Tencor): This maker of equipment used by semiconductor manufacturers just barely beats Pepsi's dividend yield right now, offering a 3.15% yield versus the soda slinger's 3.11%. The two companies also run neck and neck when it comes to long-term dividend growth, as KLA-Tencor's 67% dividend boost over the last decade edged out Pepsi's 63% lift.

But that's just a snapshot of a healthy growth stock that just happens to trade at a generous discount at the moment. Smart investors can lock in that dividend yield at levels above 3% right now and then enjoy KLA-Tencor's rebound to fantastic growth prospects in the long run.

The company is a leader in chip-testing machines, selling into a unique spot in the semiconductor production pipeline. KLA-Tencor counts essentially all of the chip sector's giants among its customers, led by Samsung and Taiwan Semiconductor Manufacturing. If you believe that semiconductors will play a significant part in the global economy for decades to come, you have to conclude that leaders in the manufacturing space -- including KLA-Tencor -- can look forward to strong long-term results.

The stock is on sale due to trade tensions between California company KLA-Tencor's home country and China, where many of its customers have set up their chipmaking shop. In theory, import tariffs on American goods going into China could hurt KLA-Tencor's business prospects. However, it isn't always easy to find a drop-in replacement for its machinery from other suppliers. The order slowdowns the company is experiencing at the moment won't last forever, and the equipment orders KLA-Tencor isn't receiving today due to the drama in international politics would be released when the tariff-based tensions reach their conclusion.

In the meantime, we're still looking at a company with 22% bottom-line profit margins and 13% year-over-year revenue growth in its most recent report. You can buy into this high-quality business, with zero long-term debt on its balance sheet, at share prices of less than 11 times forward earnings and 20 times free cash flows. Pepsi would kill for those margins and/or growth rates, and the soda stock is selling at far higher valuation ratios as well.

So KLA-Tencor and Pepsi may be evenly matched in terms of their current dividend stats, but one is a sleepy, low-growth business with overvalued shares and the other is an exciting, long-term growth company whose share prices have been saddled with a temporary discount. I know which one I'd rather own.

Still on target for growth

Rich Duprey (Target): Who doesn't love a mispricing play? That's what investors get when they look at Target stock, which was crushed following a pretty decent earnings report. Although the company slightly missed Wall Street's revenue and earnings expectations, it still put in a strong third-quarter performance and offered indications of better things to come.

Target generated $17.8 billion in revenue, which resulted in profits of $1.09 per share, just short of analyst forecasts of $17.9 billion and $1.11 per share, respectively. Yet it also posted some strong comparable-store sales numbers of 5.4% growth and it saw online sales surge 49% year over year, which was an acceleration of the e-commerce expansion recorded in the second as consumers responded to its two-day free shipping policy.

With the Christmas shopping season now starting in earnest, Target ought to be able to hold its own against rivals and Walmart.

Target's stock has lost almost a quarter of its value from its recent highs, which gives investors the chance to buy into this retailer, which is trading at just 13 times trailing earnings and 12 times this year's estimates. The stock is also priced in the bargain-basement bin, going for 10 times the free cash flow it produces. With a dividend that yields 3.7%, that means investors can earn a nice revenue stream while awaiting the capital appreciation to come.