Think You Know PepsiCo? Here's 1 Little-Known Fact You Can't Overlook.

Core Viewpoint - PepsiCo is currently offering a historically high dividend yield of 3.6%, indicating that the stock may be undervalued, while its long history of reliable dividend growth enhances its attractiveness to investors [1][5]. Group 1: Company Overview - PepsiCo is the second-largest beverage company in the U.S., primarily known for its cola brand, but it also leads in the salty snacks market through its Frito-Lay division and has a significant packaged food operation under Quaker Oats [2]. - The company competes effectively across all its business segments, distinguishing itself with strong marketing and distribution capabilities, making it a valuable partner for retailers globally [3]. Group 2: Financial Performance - Currently, PepsiCo's financial performance is somewhat weak, influenced by broader concerns in the consumer staples sector, but historical trends suggest that these challenges are likely to be temporary [4]. - Over the past decade, PepsiCo's dividend has grown at an annualized rate of 7%, which is significantly higher than the historical inflation rate, indicating an increase in the buying power of its dividends [6]. Group 3: Dividend Growth - PepsiCo has a remarkable track record of increasing its dividend for 52 consecutive years, placing it in the elite category of Dividend Kings, which reflects strong management through various economic conditions [5]. - The yield on cost for long-term shareholders has improved significantly; for instance, a purchase in 2013 at a stock price of $87.06 would yield approximately 6.2% today, compared to the initial yield of 2.6% [7]. Group 4: Investment Perspective - Given the current yield and the company's historical ability to grow its business, PepsiCo presents itself as an attractive buy-and-hold investment for dividend-focused investors, especially those with a long-term outlook [8].