Should You Buy the 2 Highest-Paying Dividend Stocks in the Nasdaq?

Core Viewpoint - The Nasdaq 100 index features both high-growth stocks and stable dividend-paying companies, with Kraft Heinz and PepsiCo highlighted as potential investment opportunities for income-seeking investors. Group 1: Kraft Heinz - Kraft Heinz has a current dividend yield of 6.1%, having merged in 2015 to become one of the largest consumer goods companies [2] - The company initially raised dividends for three years but then significantly cut its dividend budget due to less profitable acquisitions, resulting in a stagnant quarterly dividend of $0.40 per share since 2019 [3] - Despite a 25% decline in stock price over the last two years, Kraft Heinz's free cash flows have more than doubled, indicating strong underlying business performance [5] - The stock trades at 12 times trailing earnings and 10 times free cash flows, suggesting it is undervalued despite inflationary pressures and competition from store brands [7] Group 2: PepsiCo - PepsiCo boasts a 4.2% dividend yield and has a 53-year streak of annual payout increases, making it a "Dividend King" [8] - The stock has decreased by 28% over the past two years, contributing to higher dividend yields due to larger payouts divided by lower share prices [8] - Sales growth has been flat recently, contrasting with significant growth from 2020 to 2023, leading to a decrease in valuation multiples [10] - PepsiCo is actively innovating with high-protein drinks and expanding into energy drinks, while classic snacks are experiencing growth in international markets [11] - The stock is considered a modestly priced option with a strong commitment to dividends, appealing to risk-averse investors [12]