Based on the Sept. 28 closing price, a $10,000 investment in PepsiCo (PEP -0.65%) stock would generate about $461 in dividend income over the next 12 months. In July, the company raised its quarterly dividend 4% to $1.48 per share, or $5.92 annualized. Based on that payout, the stock's forward (1-year) dividend yield is 4.61%.
Image source: The Motley Fool.
That high yield, backed by 54 consecutive years of dividend increases, makes PepsiCo a solid consumer staple to own for the long term... and a Dividend King, which is any company that has increased its annual dividend for at least 50 consecutive years. The shares are worth a look today because the company is delivering healthy sales momentum even while offering investors an above-average yield.
Management expects full-year organic revenue to rise 2% to 4% in 2025. So far this year, PepsiCo's global organic volume is growing at its fastest pace since 2022. That combination helps support its ability to keep raising the dividend.
Analysts also expect adjusted earnings to grow at an annualized rate of about 5% over the long term. That outlook reflects management's push to refresh key global brands, drive innovation, and protect affordability in an inflationary environment. The company is also working to boost productivity and manage costs, which can expand margins and allow earnings to grow faster than revenue over time.
With those strengths in place, PepsiCo's high yield suggests the market may be discounting its outlook. That makes the stock a compelling dividend pick to consider buying right now.
