PepsiCo Has Raised Dividends in Each of the Past 50+ Years

Image: Pepsi’s shares continue to be choppy, but we like its consecutive annual dividend growth streak.

By Brian Nelson, CFA

On April 23, PepsiCo (PEP) reported solid first-quarter 2024 results that showed a beat on both the top and bottom lines. On an organic basis, revenue grew 2.7% on a year-over-year basis, while core earnings per share of $1.61 beat the consensus number. Core constant currency earnings per share growth was 7% in the period. Management had a lot to say about the quarter and outlook in the press release:

During the first quarter, our businesses remained agile and performed well, with a strong performance from our International business. We delivered a sequential improvement in our volume trends, and year-over-year growth in our net revenue, operating profit margin and EPS – despite the impact of certain product recalls at Quaker Foods North America and a difficult net revenue growth comparison from the prior year.

As we look ahead, we will continue to focus our efforts on executing well in the marketplace and delivering great-tasting products that offer convenience and good value to the consumer. We will also continue to elevate and accelerate our productivity initiatives to support continued investments in our brands, capabilities and pep+ initiatives. As a result, we continue to expect to deliver at least 4 percent organic revenue growth and at least 8 percent core constant currency EPS growth in 2024. In addition, our previously announced 7 percent annualized dividend increase is expected to begin with our June 2024 payment and will represent our 52nd consecutive annual increase.

As management noted in its commentary, looking to all of 2024, PepsiCo is targeting at least a 4% increase in organic revenue and at least 8% increase in core constant currency earnings per share. Including currency headwinds, core earnings per share is expected to be at least $8.15 in 2024, roughly 7% higher than 2023’s mark of $7.62. 

The beverage and snacks giant plans to return $8.2 billion in cash to shareholders during 2024, with dividends accounting for $7.2 billion and share buybacks the balance. We love PepsiCo’s consecutive annual dividend growth streak, and the firm continues to deliver where it counts.