May 27, 2025 a 02:46 am
PEP: Dividend Analysis - PepsiCo, Inc.
PepsiCo, Inc., a giant in the beverage and food industry, showcases a robust dividend profile with over 50 years of dividend payments without interruption. Its diverse product portfolio and strong market presence support a resilient cash flow, enabling consistent dividend disbursements. While the payout ratios are elevated, suggesting a potential risk, the company's steady growth in dividends indicates confidence in its long-term earnings potential.
📊 Overview
The following table provides an overview of PepsiCo, Inc.'s dividend-related metrics, highlighting its sector, dividend yield, and history.
| Aspect | Value |
|---|---|
| Sector | Consumer Staples |
| Dividend yield | 4.24 % |
| Current dividend per share | 5.27 USD |
| Dividend history | 54 years |
| Last cut or suspension | None |
📈 Dividend History
With a history of 54 years without a cut, PepsiCo, Inc.'s dividend payments reflect its commitment to rewarding shareholders. This degree of stability is often associated with well-managed financials and a strong market position.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 2.7775 |
| 2024 | 5.33 |
| 2023 | 4.945 |
| 2022 | 4.525 |
| 2021 | 4.2475 |
📈 Dividend Growth
PepsiCo, Inc. demonstrates moderate yet consistent dividend growth, enhancing its appeal as a reliable choice for income-seeking investors.
| Time | Growth |
|---|---|
| 3 years | 7.86% |
| 5 years | 7.04% |
The average dividend growth is 7.04% over 5 years. This shows moderate but steady dividend growth.
🗣️ Payout Ratio
The payout ratio is a critical indicator of dividend sustainability, reflecting the proportion of earnings and cash flow distributed to shareholders.
| Key figure | Ratio |
|---|---|
| EPS-based | 77.09 % |
| Free cash flow-based | 91.72 % |
The higher EPS and FCF payout ratios suggest a significant proportion of earnings and cash flows are distributed as dividends, which may limit reinvestment flexibility.
🗣️ Cashflow & Capital Efficiency
Efficient cash flow management is essential for sustaining dividends and driving growth, providing a buffer during economic downturns.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.42% | 3.39% | 2.25% |
| Earnings Yield | 4.56% | 3.88% | 3.57% |
| CAPEX to Operating Cash Flow | 42.52% | 41.05% | 48.16% |
| Stock-based Compensation to Revenue | 0.39% | 0.41% | 0.40% |
| Free Cash Flow / Operating Cash Flow Ratio | 57.48% | 58.95% | 51.84% |
| Return on Invested Capital | 13.73% | 12.66% | 13.93% |
The figures reflect a robust cash flow position supporting both the dividend payments and reinvestment in growth platforms.
🗣️ Balance Sheet & Leverage Analysis
A comprehensive balance sheet analysis provides insight into a company's financial health, focusing on its ability to manage debts and fund growth.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 2.49 | 2.41 | 2.31 |
| Debt-to-Assets | 0.45 | 0.44 | 0.43 |
| Debt-to-Capital | 0.71 | 0.71 | 0.70 |
| Net Debt to EBITDA | 2.56 | 2.22 | 2.32 |
| Current Ratio | 0.83 | 0.85 | 0.80 |
| Quick Ratio | 0.65 | 0.68 | 0.61 |
| Financial Leverage | 5.51 | 5.43 | 5.37 |
The leverage metrics indicate PepsiCo's effective use of debt financing, reflecting its strategic capitalization to fuel expansion and growth.
🗣️ Fundamental Strength & Profitability
PepsiCo's profitability metrics offer valuable insights into its efficiency and capacity to convert revenue into profits.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity (ROE) | 53.09% | 49.04% | 51.96% |
| Return on Assets (ROA) | 9.63% | 9.03% | 9.67% |
| Net Profit Margin | 10.43% | 9.92% | 10.31% |
| EBIT Margin | 14.01% | 13.38% | 13.48% |
| EBITDA Margin | 18.16% | 17.22% | 17.27% |
| Gross Margin | 54.55% | 54.21% | 53.03% |
| R&D to Revenue | 0% | 0% | 0% |
These profitability ratios affirm PepsiCo's strong operational efficiency and effective management of expenses, contributing to its shareholder value.
📈 Price Development
📊 Dividend Scoring System
| Criteria | Score | Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 33/40
🗣️ Rating
In conclusion, PepsiCo, Inc. presents a compelling dividend profile, with robust stability and steady growth. The high payout ratios necessitate careful monitoring; however, the company's financial prowess and market position provide confidence in its ability to sustain forthcoming dividends. Investors seeking dependable income with moderate growth may find PepsiCo's stock an attractive addition to their portfolio.