PepsiCo (NASDAQ:PEP) is a dividend aristocrat, which means it has continuously increased its dividend payout every year for the past 25 years. Investing in reliable dividend stocks, such as those on the aristocrat list, is a rewarding way to unlock exceptional returns for years on end. PepsiCo stands out as a buy because it offers investors low risk and high dividend growth. It's in this spirit that we'll take a closer look at soda and snack giant and why it will continue to reward shareholders for many years to come.

Source: The Motley Fool

A market leader
PepsiCo may be known for its sugary soda drinks, but the company's snack portfolio is stealing the show these days. Thanks to its Frito-Lay business, Pepsi is the world's largest snack food company by market share. Moreover, its snack division boasts 22 brands that each pull in annual sales north of $1 billion. This is good for shareholders because it equips the company with another strong revenue channel outside of its core soft-drink segment.

Investors will also be happy to know that Pepsi is an expert when it comes to rewarding shareholders. In fact, the king of pop is on pace to return a whopping $8.7 billion to PepsiCo stockholders in 2014 through higher dividends and share buybacks. Pepsi has paid a dividend every year since 1952 and has increased its payout for the past 42 consecutive years. This, together with the company's ability to generate strong cash flow, tell us that Pepsi should be able to continue raising its dividend in the years ahead.

Source: The Motley Fool

The stock currently boasts a dividend yield of 2.8% and a payout ratio of 53%. The payout ratio is important because it tells investors how much of the company's net income is being given back to shareholders. Additionally, at 53% of Pepsi's net income, management still has ample cash to invest in growing the business.

Pepsi increased its dividend by as much as 15% in June to $2.62 annually per year, up from $2.27 per share. On top of this, Pepsi also plans to buy back $5 billion of its shares this year, thus further boosting shareholder value.

Shares of Pepsi are trading around the stock's 52-week high today at about $92 apiece. But don't let that discourage you. PepsiCo's world-class portfolio of brands combined with its dominant market position should carry the stock higher in the years ahead. In the meantime, owning Pepsi means investors will enjoy reliable cash payouts in the form of dividends.

Tamara Rutter owns shares of PepsiCo. The Motley Fool recommends PepsiCo. The Motley Fool owns shares of PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.