Healthier products should protect their dividends

Article Excerpt

Both PepsiCo and Kraft Heinz continue to shift to healthier products, even as COVID-19 stay-at-home orders spur sales of their processed foods and snacks. Still, their long-term shift will help to support their dividends and pave the way for more-significant share-price gains. PEPSICO INC. $138 is a hold. The company (Nasdaq symbol PEP; Conservative-Growth Dividend Payer Portfolio, Consumer sector; Shares outstanding: 1.4 billion; Market cap: $193.2 billion; Dividend yield: 3.0%; Dividend Sustainability Rating: Above Average; www.pepsico.com) is the world’s second-largest soft-drink maker after Coca-Cola. Its other brands include Frito-Lay snack foods, Gatorade sports drinks, Tropicana fruit juices and Quaker Oats cereals. Starting with its June 2020 payment, PepsiCo raised your quarterly dividend by 7.1%, to $1.0225 a share from $0.955. The company’s new annual rate of $4.09 yields 3.0%. PepsiCo has raised that amount annually for the past 48 years. In the quarter ended June 13, 2020, sales fell 3.1%, to $15.95 billion from $16.45 billion a year earlier. While sales of snack foods surged due to…

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