PepsiCo, Inc. (PEP) has declared a quarterly dividend of $1.0225 per share with a 3.11% dividend yield, a 7% increase from the $0.955 previous dividend.
“Today’s action is consistent with PepsiCo’s previously announced increase in its annualized dividend to $4.09 per share from $3.82 per share, which will begin with the June 2020 payment” the company announced.
This dividend is payable on June 30, 2020 to shareholders of record at the close of business on June 5, 2020.
PepsiCo has paid consecutive quarterly cash dividends since 1965, and 2020 marks the company’s 48th consecutive annual dividend increase- earning it the elusive ‘Dividend Aristocrat’ title for 25 years+ of consistent dividend growth.
PEP stock is currently trading down 8% on a three-month basis, but according to RBC Capital analyst Nik Modi, this provides an attractive entry point for a long-term compounder.
He has a buy rating on PEP with a $153 price target (16% upside potential). According to Modi, “profit pressure is largely being driven by reinvestment, which we believe will result in future market share gains, efficiencies, and talent retention.”
However, Modi also lowers his FY’20 EPS estimate to $5.36 (from $5.95) driven by expected 2Q weakness and a forecast slow recovery.
Overall the stock scores a cautiously optimistic Moderate Buy Street consensus, with an average analyst price target of $143 (9% upside potential). (See PepsiCo stock analysis on TipRanks).
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