Pepsi Hikes Dividend, But Still Chasing Coke
- March 16, 2010
- Dividend Aristocrats, Dividend Investing, Dividend News, Dividend Stocks
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PepsiCo (PEP: 66.66 +0.39%) announced yesterday that the beverage giant is increasing their quarterly dividend by 7% to $.48 per share.
Pepsi is a member of the elite group of dividend aristocrat stocks which have increased their dividend for at least 25 consecutive years. In fact, this marks the 38th consecutive year that Pepsi has increased their dividend payment as the company has a strong track record of returning cash to their shareholders. Over the last five years, Pepsi has returned $26 billion to their investors in the forms of dividends and share repurchases.
Following the dividend increase, Pepsi will offer dividend investors a 2.9% yield. The 7% dividend hike was inline with Coca Cola’s 7% increase last month in their quarterly dividend. However, Pepsi’s dividend yield is still below the 3.3% yield that Coke (KO: 68.08 +0.37%) offers.
Last year, Coke also bested Pepsi in stock performance. Coca Cola stock jumped 26%, while Pepsi shares gained a modest 11%. However, Pepsi is looking to turn the tables this year. Since the beginning of 2010, Pepsi stock has gained nearly 9%, while Coca Cola shares are down 6%.
Pepsi shares should benefit further from a $15 billion share repurchase program that the company also announced. The repurchase program runs through June 2013.
