This is a guest post analyzing PepsiCo is from Ben Reynolds at Sure Dividend. Sure Dividend is focused on high quality dividend growth stocks suitable for long-term investors.
PepsiCo is one of the most easily recognized companies in the U.S. The company’s flagship Pepsi soda brand can be found in virtually every gas station, corner store, and grocery store in the U.S. In addition to the Pepsi brand, PepsiCo also own the following drink brands: Gatorade, Mountain Dew, Lipton, Tropicana, and 7 Up (among others – more on that later).
The Conservative Income Investor names PepsiCo as one of the Top 10 core holdings of a portfolio. PepsiCo ranks in the Top 10 using The 8 Rules of Dividend Investing, which ranks stocks with a 25+ year dividend history over several criteria that have historically improved investor returns or reduced risk.
PepsiCo is more than just U.S. … Read the rest of this article!
In the 1930s, a youngish man named Alfred Cowles III founded the Cowles Commission for Economic Research. One of Mr. Cowles’ first projects involved back-testing stock market performance from 1871 through the Great Depression, paying special attention to the effect of reinvested dividends during this time frame.
This was a purely academic exercise—back then, dividends weren’t something that you reinvested because the technology and affordability didn’t exist for it to make sense. It wasn’t a thing. If you owned $40,000 worth of AT&T, you collected your $800 in the mail every three months and used the dividends to help you support your lifestyle. Wanted to make a house payment and take care of the utilities? That’s what the AT&T dividends were for. Wanted to reinvest? You’d have to make a special buy order to purchase 100 shares. If AT&T was trading at $30 per share, you’d have to come up … Read the rest of this article!
I just had to stop what I was doing in the middle of the day and purchase shares in two companies that fell in value by a meaningful amount over the past 24 years. I also produced an analysis over at Patreon which you can access by subscribing here. That’s the thing about investing–you never know when an opportunity will arrive. There is nothing particularly special about a random weekday in January, yet here we are. … Read the rest of this article!
Last week, Coca-Cola announced that the quarterly dividend was going to increase from $0.305 per share to $0.33 per share. It is that announcement every February, dating back to 1963, that explains why I find this company so appealing. Truth to be told, as nice as the income increases are, it is really the consistent earnings power represented by that dividend increases that catches my attention.
I want to be sure I separate the roots from the leaves: The real reason that Coca-Cola is such an attractive investment is that there are 500 nonalcoholic beverages across 210 countries earning $0.275 profits on every $1 paid by the customer. You buy a case of Coca-Cola for $7, the company goes and makes $1.92 in profit that can be paid out to shareholders, used to repurchase stock, or make new bottling/drink acquisitions. It’s a little bit more complicated than that—I used the … Read the rest of this article!
On the list of possible mistakes that an income investor can make, one of them is yield-chasing which refers to buying an ownership position in a business simply because it has a very high dividend yield. Absent a terrible recession like 1973-1974 or 2008-2009 in which the prices of even high quality businesses get cheap, companies usually only have yields like this because they are low-quality businesses with questionable long-term cash flows and/or a poor relationship between the company’s debt load and those cash flows.
One of those companies that regularly attracts the attention of income investors in Windstream. Windstream is a telecom company that runs the wirelines for people that need internet and phone service on the middle of nowhere, and it services 3 million customers across 29 states. It has caught the attention of many investors because it has maintained a $1 dividend since 2007, and people see … Read the rest of this article!