PepsiCo, Inc. (PEP): One of the Best High-Yield Dividend Stocks for 2025 and Beyond

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11-05-2025

We recently published a list of the . In this article, we are going to take a look at where PepsiCo, Inc. (NASDAQ:PEP) stands against other best high-yield dividend stocks.
Over the years, dividend-paying stocks have become increasingly popular as investors lean toward income-focused investment strategies. Many conservative investors have committed hundreds of billions of dollars across numerous funds based on the belief that companies with a consistent track record of raising dividends tend to deliver the strongest long-term market performance.
According to Ed Clissold of Ned Davis Research, over 80% of companies in the broader market currently pay dividends, and 324 of them have either initiated or increased their payouts over the past year. Interestingly, it was earlier research by Clissold's firm that helped spark the widespread interest in dividend-growing stocks. That study, based on an older return calculation method that has since been widely replicated, highlighted the strong performance of companies that regularly increased their dividends.
However, as the firm has updated its methods to align with changes in the industry, the findings suggest that while dividend growers have performed well, focusing on high-yielding dividend stocks may be even more rewarding. This yield-based strategy has outperformed dividend growers in both rising and falling markets since 1973. Financial advisers suggest that investors start by examining a stock's dividend yield, which is determined by dividing the annual dividend by the stock's current price. This figure indicates the income an investor earns for every dollar put into the stock.
However, high dividend yield tends to come with higher volatility and more frequent portfolio turnover. It isn't always a positive sign. It can sometimes signal trouble, especially if it's driven by a drop in the stock's price. In these situations, there's a risk that the company may reduce its dividend payments—something that often happens during periods of financial strain. Advisers emphasize the need to go beyond surface-level metrics and examine a company's core financials to assess its overall stability and strength. Jason Alonzo, managing director at Harbor Capital Advisors, made the following comment about investing in dividend stocks:
'Make sure the company has a strong balance sheet and its prospects for earnings-per-share growth are strong, so the company is well-positioned to maintain dividend payments in the future even if there is a recession.'
While the debate between dividend growth and high yield continues, analysts emphasize that dividend-paying stocks are not all created equal. Stocks that offer a solid yield along with steady dividend increases often reflect strong fundamentals, as they suggest the company can reward shareholders while still investing in future growth. The dividend payout ratio plays a critical role in assessing a company's flexibility with its dividend policy. Firms that use nearly all of their earnings to cover dividends—or barely earn enough to sustain them—might face challenges, especially when under competitive pressure, due to limited cash flow for operational support.
A close up of a glass of a refreshing carbonated beverage illustrating the company's different beverages.
For this article, we used a screener to identify dividend companies with above-average dividend yields. From there, we picked companies that have raised their payouts for at least 10 consecutive years, which shows their long-term growth. Finally, we picked 15 stocks with the highest dividend yields, as of May 9, and ranked them accordingly.
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Dividend Yield as of May 9: 4.36%
PepsiCo, Inc. (NASDAQ:PEP) is an American food, snack, and beverage company. The stock has fallen more than 13% since the beginning of 2025 as it has lowered its guidance. The company now anticipates only a modest organic revenue increase and has outlined plans to return $7.6 billion to shareholders through dividends and $1 billion via share repurchases. It also projects that its core earnings per share, adjusted for restructuring, acquisitions, and other one-time expenses, will remain flat year-over-year, down from its earlier forecast of mid-single-digit growth. Overall, Pepsi now expects its 2025 core EPS to decline by 3%, a reversal from its previous outlook for a slight gain.
In the first quarter of 2025, PepsiCo, Inc. (NASDAQ:PEP) reported revenue of $17.9 billion, down 1.8% from the same period last year. However, the revenue surpassed analysts' estimates by $190 million. The company's operating profit came in at $2.5 billion, compared with $2.7 billion in the prior-year quarter. It reported no growth in beverage volumes and a 3% drop in convenient foods sales, highlighting ongoing pressure on consumer demand.
On May 6, PepsiCo, Inc. (NASDAQ:PEP) declared a 5% hike in its quarterly dividend to $1.4225 per share. Through this increase, the company stretched its dividend growth streak to 54 years, which makes PEP one of the best dividend stocks on our list. As of May 9, the stock has a dividend yield of 4.36%.
Overall, PEP ranks 9th on our list of the best high yield dividend stocks. While we acknowledge the potential of PEP as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than PEP but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the .
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Disclosure: None. This article is originally published at .