If we compare PepsiCo and UPS in terms of the three most important dividend metrics, as I do in the brief slideshow below, we find that:
- Both PepsiCo and UPS have above average dividend yields, comfortably exceeding the 2.11% average yield on the S&P 500.
- Although both companies have payout ratios in excess of 60%, the stability of their business models coupled with the companies' strong competitive positions, suggests that their current dividends are safe. The question, in turn, concerns whether or not their high payouts will throttle future dividend increases.
- Finally, PepsiCo and UPS's dividend histories reflect their commitments to increase payouts on an annual basis. Each company has done so consistently over the past decade.
With all of this in mind, if an income investor had to choose between these two stocks based solely on these three metrics, UPS seems to take the cake. To see why, simply scroll through the brief slideshow below.