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PepsiCo Inc.'s (NYSE:PEP) shares appear to be offering investors a new buying opportunity as the stock is now off the recent highs of about $73 per share. Pepsi's shares currently trade for about $70. That might not sound like a big drop, but considering the market is near five-year highs and that dividend-paying stocks are in demand, this dip is worth buying.

Pepsi owns well-known brands such as Aunt Jemima, Ruffles, Doritos, Quaker Mountain Dew, Gatorade, and others. This product line provides a steady source of revenues in almost any economy, and that adds to the appeal of this stock. Here are three reasons why investors should consider buying the recent dip in Pepsi shares:

1. Pepsi is turning more focus towards healthy foods and snacks. Earlier this year, the company announced it would invest about $30 million per year into product research and development for healthier snacks. This confirms the trend into health foods. However, Pepsi is also positioned to acquire health food and snack companies.

CEO Indra Nooyi has stated that she wants to turn Pepsi into a health and wellness company that offers healthy products like hummus and oatmeal. With organic and health-focused foods growing at much higher rates than conventional foods, the CEO is smart to position Pepsi towards this category.

2. Pepsi has been a great stock to own for dividend growth and that trend appears poised to continue. Pepsi has raised the dividend annually for more than a decade. For example, in 2001, the dividend was just 14 cents per quarter, but thanks to consistent increases, it is currently 54 cents per quarter. That means the dividend has more than tripled in just over 10 years, and few companies can match that record.

3. When evaluating certain metrics, Pepsi's shares trade at a discount to The Coca-Cola Company's (NYSE:KO) shares. For example, Pepsi's shares trade for about 17 times earnings, while Coca-Cola's share trade for about 19. If Pepsi was to trade at the same multiple, the shares could have about $14 worth of upside. Also, Pepsi shares provide a slightly better dividend yield at 3%, versus the 2.7% offered by Coca-Cola .

Key Data Points For Pepsi:

  • Current price: $70.46
  • 52-Week Range: $58.50 to $73.66
  • Dividend: $2.15, which provides a yield of 3%
  • 2012 Earnings Estimate: $4.07 per share
  • 2013 Earnings Estimate: $4.41 per share
  • P/E Ratio: about 17 times earnings

Key Data Points For Coca-Cola:

  • Current price: $38.12
  • 52-Week Range: $31.67 to $40.67
  • Dividend: $1.02, which provides a yield of 2.7%
  • 2012 Earnings Estimate: $1.99 per share
  • 2013 Earnings Estimate: $2.18 per share
  • P/E Ratio: about 19 times earnings

Data is sourced from Yahoo Finance.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: No guarantees or representations are made. Please consult a financial advisor before making investments.

Source: 3 Reasons To Buy The Dip In Pepsi's Shares Now