PepsiCo: Example Of What's Wrong With Dividend Stocks

Sungarden Investment Publishing
Investing Group Leader

Summary

  • PepsiCo hit a 52-week low, and while its stable dividend yield and profitability are positives, the technicals and market sentiment make it a sell.
  • I see three potential outcomes for PEP: slow bleed (45% probability), fast flush (30%), or a minor dip (25%).
  • PEP's Yield At a Reasonable Price (YARP) valuation is unattractive, with a high dividend yield indicating high risk; the technical pattern suggests further downside potential.
  • Despite its quality and stable dividend, PEP doesn't fit my yield-at-a-reasonable-price methodology, making it a poor buy in the current market.
  • Looking for a helping hand in the market? Members of Sungarden YARP Portfolio get exclusive ideas and guidance to navigate any climate. Learn More »
Close up soda pour

Jonathan Knowles

Oh, the irony. I was just sitting down to write about another well-known cola company stock (take a guess which one), when I saw a note from one of my Seeking Alpha editors: "how about writing about PepsiCo. (NASDAQ:

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This article was written by

Sungarden Investment Publishing
8.15K Followers
I'm Rob Isbitts, founder of Sungarden Investment Publishing. I run the new investing group Sungarden Investors Club, a community dedicated to navigating the modern investment climate with humility, discipline, and a non-traditional approach to income investing. I've been charting investments since the 1980s, and I spent decades an an investment advisor and fund manager before semi-retiring in 2020. Now, this investing group is my focus. The markets tells us a story…we just have to listen! I teach subscribers how to do that.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of KO either through stock ownership, options, or other derivatives. 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.

This article was about PEP, but I briefly mentioned KO, so disclosing my position.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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