1 Reason to Buy PepsiCo (PEP) Stock That's Been a Good Reason for More Than 50 Years

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Selena Maranjian, The Motley FoolSun, Sep 21, 2025, 7:57 PM 3 min readPepsiCo recently sported a fat dividend yield of 4.1%.It's been increasing its payout for more than 50 years in a row.It's facing some challenges but is working on turning itself around.10 stocks we like better than PepsiCo ›There are lots of reasons to like PepsiCo (NASDAQ: PEP) as a possible investment for your long-term portfolio. One of the best reasons is its generous dividend yield -- recently at 4.1%. That yield is far above the S&P 500's recent yield of just 1.2%, and better still, it's a payout that's been growing at a good clip -- an annual average of more than 7% over the past decade.But wait -- there's more! Its payout ratio -- the percentage of earnings paid out in dividends -- was recently quite reasonable, too, at 67%. That leaves plenty of room for further growth. (PepsiCo has upped its dividend for 53 years in a row!)Image source: Getty Images.Many people might imagine PepsiCo as mainly a beverage business, but they'd be wrong. It's very much a snack business, too, with brands such as Lay's, Doritos, Cheetos, and Quaker alongside Gatorade, Pepsi-Cola, Mountain Dew, and SodaStream. PepsiCo has a new pending acquisition, too, of the prebiotic soda brand Poppi.PepsiCo's stock looks appealing at recent levels, with a forward-looking price-to-earnings (P/E) ratio of 16.5, well below the five-year average of 21.9. The low valuation is due to the stock having slumped in recent years, as it tries to adapt to changing tastes. It's doing so, including via the Poppi acquisition, and it's cutting costs, too.Chairman and CEO Ramon Laguarta recently noted:As we look ahead, we will continue to build upon the successful expansion and growth of our International business and accelerate initiatives to improve our North America business performance. These initiatives include more portfolio innovation and cost optimization activities that aim to stimulate growth and profitability. As a result, for fiscal 2025, we remain confident in our ability to deliver low-single-digit organic revenue growth...This could be a great time to snag some shares if you're bullish on PepsiCo's long-term potential.Before you buy stock in PepsiCo, consider this:The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PepsiCo wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $661,694!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,082,963!*Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,749.25 -3.25 (-0.05%)Dow Futures46,720.00 -4.00 (-0.01%)Nasdaq Futures24,994.50 -8.50 (-0.03%)Russell 2000 Futures2,479.80 -2.10 (-0.08%)VIX16.10 +0.65 (+4.21%)Gold3,781.00 +5.90 (+0.16%)PortfolioSign in to access your portfolioSign inTop gainersMTSR Metsera, Inc. 53.58 +20.26 (+60.80%)DGNX Diginex Limited 17.75 +4.15 (+30.51%)QMMM QMMM Holdings Limited 105.90 +23.06 (+27.84%)GGAL Grupo Financiero Galicia S.A. 32.03 +5.58 (+21.10%)BBAR Banco BBVA Argentina S.A. 9.85 +1.66 (+20.27%)Top losersCOMP Compass, Inc. 7.92 -1.48 (-15.74%)QUBT Quantum Computing Inc. 20.21 -3.06 (-13.15%)OPEN Opendoor Technologies Inc. 8.38 -1.19 (-12.43%)PTRN Pattern Group Inc. 14.00 -1.63 (-10.43%)BMNR Bitmine Immersion Technologies, Inc. 55.10 -6.19 (-10.10%)Most activeNVDA NVIDIA Corporation 183.61 +7.01 (+3.97%)OPEN Opendoor Technologies Inc. 8.38 -1.19 (-12.43%)SNAP Snap Inc. 8.53 +0.37 (+4.53%)PLUG Plug Power Inc. 2.6500 +0.4700 (+21.56%)BBAI BigBear.ai Holdings, Inc. 7.08 +0.23 (+3.36%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBETR Better Home & Finance Holding Company 49.98 +15.89 (+46.61%)RIVN Rivian Automotive, Inc. 15.24 +0.86 (+5.98%)APLD Applied Digital Corporation 24.45 +3.97 (+19.38%)KVUE Kenvue Inc. 16.97 -1.37 (-7.47%)AMAT Applied Materials, Inc. 200.52 +10.42 (+5.48%)Top economic events