PURCHASE, N.Y. – PepsiCo, Inc. (NASDAQ: NASDAQ:PEP) announced Thursday that its Board of Directors has declared a quarterly dividend of $1.355 per share on the company's common stock, marking a 7% increase from the same period last year. The new dividend rate is in line with the previously announced hike in the annualized dividend to $5.42 per share from $5.06, effective with the dividend paid in June 2024.
The upcoming dividend is scheduled to be paid on September 30, 2024, to shareholders on record as of September 6, 2024. PepsiCo has a long-standing history of delivering dividends, having provided shareholders with consecutive quarterly cash dividends since 1965. This year, the company celebrates its 52nd successive annual dividend increase.
PepsiCo's performance has been underpinned by its diverse portfolio of beverages and convenient foods, boasting prominent brands such as Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. In 2023, the company generated over $91 billion in net revenue, with several of its brands achieving more than $1 billion each in estimated annual retail sales.
Under the vision of becoming the Global Leader in Beverages and Convenient Foods, PepsiCo is driving its strategy with a focus on sustainability and human capital through its pep+ (PepsiCo Positive) initiative. This strategy emphasizes value creation and growth within planetary boundaries while fostering positive change for the environment and society.
In other recent news, PepsiCo, Inc. has issued Senior Notes totaling $2.25 billion, generating net proceeds of approximately $2.23 billion intended for general corporate purposes. In recent earnings news, PepsiCo reported an earnings per share (EPS) of $2.28, surpassing the projected $2.16, even though the sales figure fell short of expectations. The company has adjusted its organic sales growth forecast for 2024 to around 4%, a decrease from the previous guidance. This adjustment follows a weaker volume trend observed in North America, particularly within its Frito-Lay North America division.
In response to these developments, analyst firms have made their assessments. Citi has maintained a Buy rating on PepsiCo, expressing confidence in the company's prospects over a 12-month period. Similarly, TD Cowen has also maintained a Buy rating, viewing PepsiCo's planned investments in the Frito-Lay North America segment as a sensible strategy. However, RBC Capital has adjusted its outlook on PepsiCo, reducing the price target to $177 from $180, citing potential earnings pressures from the North America operations.
In other company news, PepsiCo's CEO, Ramon Laguarta, remains confident in meeting the updated targets, attributing this to the recovery of the Quaker supply chain, robust international growth, and targeted consumer value strategies. The company anticipates short-term growth in Q3 and Q4, primarily driven by North America. Despite temporary demand issues in Latin America, particularly Mexico, PepsiCo's international beverage business continues to grow, with Europe's resilience and India's significant growth space contributing to a positive outlook.
InvestingPro Insights
PepsiCo's recent announcement of its dividend increase is a testament to the company's robust financial health and commitment to shareholder returns. InvestingPro data underscores this point, with a market capitalization of $235.28 billion and a strong gross profit margin of 54.64% over the last twelve months as of Q2 2024. These figures reflect PepsiCo's solid footing in the market and its ability to generate significant revenue and profit from its operations.
InvestingPro Tips further highlight the company's financial prudence and strategic positioning. Notably, PepsiCo has raised its dividend for an impressive 54 consecutive years, illustrating a reliable and growing income stream for investors. Additionally, the company operates with a moderate level of debt, which is a positive sign for investors concerned about financial stability.
For those interested in deeper analysis, there are 13 additional InvestingPro Tips available at https://www.investing.com/pro/PEP. These tips provide valuable insights into PepsiCo's financial metrics, including earnings revisions, P/E ratio, and stock volatility, which can help investors make informed decisions.
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