PepsiCo’s 90% Payout Ratio Looks Unsustainable.
The Dividend King’s Earnings Acceleration Changes the Math Quick Read – PEP’s $5.92 annualized dividend consumes 90% of core earnings, but back-to-back EPS beats and 84% net income growth signal a real inflection. – International profit surged (EMEA +29%, Asia Pacific Foods +35%) while CapEx cuts improved free cash flow coverage, giving the dividend more room than the ratio suggests. – Shares yield over 4% at $138 with a $167 analyst price target, but a second earnings miss would force a serious dividend sustainability conversation. – Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and PepsiCo didn’t make the cut
Grab the names FREE today. When PepsiCo (NASDAQ:PEP) delivered its $1.48 per share quarterly dividend, the cash hit accounts on June 30. The payment marks the first at the company’s newly raised rate, lifting the annualized dividend to $5.92 from $5.69, a 4% increase.
It also extends one of the most impressive streaks on Wall Street: 54 consecutive years of annual dividend increases, cementing Dividend King status. The headline number that should give investors pause: PepsiCo’s dividend now consumes roughly 90% of core earnings. Against FY2025 core EPS of $8.14, the new $5.92 annualized payout leaves a slim cushion.