I Predicted That PepsiCo's Dividend Yield Peaked at 4.4% Because the Dividend King Stock Was Too Cheap to Ignore. Here's Why Pepsi Is Already Up 19% in 2026 and Could Still Be a Buy Now.

Core Viewpoint - PepsiCo has experienced a significant stock price recovery after a challenging period, driven by improved sales growth and strategic initiatives, making it a potentially attractive investment opportunity. Group 1: Stock Performance - PepsiCo's stock was near a four-year low in May 2025 due to stagnant sales growth and weak consumer spending, but it rebounded, finishing 2025 down only 5.6% and rising 18.8% in 2026, outperforming the consumer staples sector and the S&P 500 [1][3]. - The stock's yield increased to 4.4% during the sell-off, but after the rally, the forward dividend yield is now at 3.5%, lower than previous highs [2][7]. Group 2: Financial Performance - In the fourth quarter of 2025, Pepsi reported faster sales growth, higher operating margins, and double-digit earnings-per-share (EPS) growth, with notable success in regions outside North America [4]. - For fiscal 2026, Pepsi is guiding for 2% to 4% organic revenue growth and 4% to 6% constant-currency EPS growth, indicating a cautious but positive outlook [5]. Group 3: Shareholder Returns - Pepsi announced a 5% dividend increase in November 2025, marking its 53rd consecutive annual increase, reinforcing its status as a Dividend King [5]. - The company plans to spend $7.9 billion on dividends in fiscal 2026 and has initiated a $10 billion stock buyback program through February 28, 2030, including $1 billion in buybacks for fiscal 2026 [6].