For income investors,PepsiCo (
) is the kind of steady stock that won't cost them sleep.
Since the 2008 financial crisis, the deepest correction in
PepsiCo shares has been 11%. That reflects the performance of the
company's earnings, one of the most stable in IBD's database.
Already one of the biggest soft drink and snack foods
providers in the world, PepsiCo is managing modest profit and
That's OK with investors more interested in the company's
quarterly dividend of 65.5 cents a share, which translates to an
annualized yield of nearly 3%. The dividend has been raised every
year for more than a decade.
While PepsiCo's profile is sedate, the company is not exactly
free of challenges.
Activist investor Nelson Peltz of Trian Partners has
criticized PepsiCo management and threatened a proxy fight.
Reports say the California teachers' retirement system, CalSTRS,
asked PepsiCo to add Peltz on the board.
There are consumer challenges, too.
Diet soda sales are falling faster than sales of other
carbonated soft drinks in the U.S., Moody's Investors Service
warned in a report Friday.
Carbonated soft drink sales fell 2.6% in 2013, while diet and
low-calorie sodas were down 5%. That reversed a longstanding
trend in which diet sodas were growing faster, says Linda Montag,
a Moody's senior vice president. But of the major soft-drink
companies, PepsiCo is the least exposed due to its large food
Growing media attention on possible health risks from
artificial sweeteners is causing the shift away from diet soda,
PepsiCo edged past profit expectations with its Q2 results
July 23. It also raised its profit outlook.
The stock is finding support at the 10-week moving