Elliott pushed the company to refranchise its bottling operations and make other changes, like divesting underperforming assets in its food business. ...

Core Insights - The article highlights consumer stocks that offer high dividend yields and potential for stock price recovery as economic conditions improve [1][2]. Group 1: Realty Income - Realty Income is known as the "monthly dividend company," maintaining consistent dividend payments since 1994, with a current yield of approximately 5.4% [4]. - The company owns nearly 15,600 properties, with a leasing rate of almost 99%, providing steady income as tenants cover maintenance and other costs [5]. - Despite a stock price decline of over 25% from its all-time high due to rising interest rates, Realty Income's profitability remains strong, with earnings of $4.11 per share in funds from operations (FFO), trading at 14 times its trailing FFO [6]. - The potential for interest rate cuts by the Federal Reserve may allow the company to refinance debt and fund new developments, possibly catalyzing stock recovery [7]. Group 2: Target - Target has experienced a significant decline in stock value, losing nearly two-thirds since late 2021 due to economic uncertainty and supply chain issues [9]. - Despite the challenges, Target has a 54-year streak of annual dividend increases, with a current payout of $4.56 per share, yielding over 4.8% [10]. - The company generated $2.9 billion in free cash flow, exceeding the $2.0 billion spent on dividends, indicating sustainability of its payout [10]. - Target's P/E ratio of 11 is notably lower than Walmart's 38, suggesting that the stock price may already reflect its challenges [11]. Group 3: PepsiCo - PepsiCo, a major player in the beverage and food industry, has faced a 25% decline in stock value over the past two years due to changing consumer preferences [12]. - The company has maintained a 53-year streak of dividend increases, with a current annual payout of $5.69 per share, yielding about 3.75% [13]. - PepsiCo generated nearly $7.1 billion in free cash flow, close to the $7.5 billion spent on dividends, with sufficient liquidity of $8.0 billion to cover payouts [13]. - The company's forward P/E ratio of 18 suggests it is reasonably priced, making it an attractive option for investors seeking income while the company works on product line improvements [14].

Core Insights - PepsiCo reported $22.73 billion in revenue for the quarter ended June 2025, a year-over-year increase of 1% [1] - The EPS for the same period was $2.12, down from $2.28 a year ago, with a surprise of +4.43% compared to the consensus estimate of $2.03 [1] Revenue Performance - Net Revenue from the International Beverages Franchise was $1.37 billion, slightly above the average estimate of $1.35 billion [4] - Net Revenue from EMEA was $4.54 billion, exceeding the average estimate of $4.34 billion [4] - Net Revenue from PBNA was $6.8 billion, slightly below the average estimate of $6.84 billion, representing a year-over-year change of -0.2% [4] - Net Revenue from PFNA was $6.48 billion, surpassing the average estimate of $6.4 billion, with a significant year-over-year change of +1054.4% [4] - Net Revenue from LatAm Foods was $2.55 billion, above the average estimate of $2.5 billion, reflecting a year-over-year decline of -16.3% [4] - Net Revenue from Asia Pacific Foods was $1 billion, in line with the average estimate of $1.01 billion [4] Core Operating Profit - Core Operating Profit for PFNA was $1.49 billion, matching the average estimate [4] - Core Operating Profit for PBNA was $994 million, exceeding the average estimate of $916.74 million [4] - Core Operating Profit for the International Beverages Franchise was $538 million, above the average estimate of $512.59 million [4] - Core Operating Profit for Corporate unallocated was -$404 million, worse than the average estimate of -$381.15 million [4] - Core Operating Profit for LatAm Foods was $545 million, surpassing the average estimate of $483.66 million [4] - Core Operating Profit for Asia Pacific Foods was $93 million, below the average estimate of $101.58 million [4] Stock Performance - PepsiCo shares returned +4.9% over the past month, outperforming the Zacks S&P 500 composite's +4.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Viewpoint - Pepsi was once regarded as a top consumer staple due to its consistent dividend growth over 50 years and strong share performance, but recent developments may indicate a shift in its market position [1] Financial Performance - Pepsi has maintained a growing dividend for 50 consecutive years, highlighting its commitment to returning value to shareholders [1] - The company's share price performance has been strong historically, contributing to its reputation as a reliable investment [1] Market Position - The perception of Pepsi as a leading consumer staple has changed over the past two years, suggesting potential challenges in its market standing [1]