PepsiCo (PEP) Dividend Report – Updated to Current Data (as of mid-February 2026)
**Key Takeaways**
📈 **Dividend Yield and Growth**: PepsiCo offers a forward dividend yield of approximately 3.43%, supported by 54 consecutive years of increases (a Dividend King with a recent 4% hike for 2026).
💰 **Cash Flow**: Operating cash flow remains strong at around $12.09 billion (TTM), with levered free cash flow at about $8.23 billion, comfortably supporting dividends and other shareholder returns despite ongoing pressures.
📊 **Analyst Ratings**: Consensus is a “Hold” (with some sources leaning toward “Moderate Buy”), average price target around $170 (ranging from ~$130 to $191), implying modest upside from current levels.
📝 **Earnings Report Summary**: The most recent report (Q4 2025, released early February 2026) showed a beat—core EPS of $2.26 (vs. $2.24 expected) and revenue of $29.34 billion (up 5.6% YoY, above estimates)—with strength across segments and reaffirmed 2026 guidance (organic revenue +2-4%, core EPS +4-6%).
👥 **Management Team**: CEO Ramon Laguarta continues to lead, emphasizing innovation, cost management, portfolio evolution (e.g., healthier options), and shareholder returns amid global challenges.
**Last Update**: February 2026 (based on latest available data as of mid-February 2026)
PepsiCo (PEP) remains a global powerhouse in snacks and beverages, with iconic brands like Pepsi, Lay’s, Gatorade, and Doritos. After a challenging 2025 with softer demand and cost pressures, the company showed solid recovery momentum in late 2025 and into 2026. Shares have rallied significantly year-to-date (up ~19% in some reports), driven by strong Q4 results, a dividend increase, and a $10 billion share repurchase authorization. The business generates reliable cash flows, maintains a long dividend growth streak, and adapts to consumer shifts toward healthier and value-oriented products.
**Recent Events**: Strong Q4 Beat Boosts Momentum, Dividend Hike Affirmed
PepsiCo’s Q4 2025 earnings (reported February 2-3, 2026) delivered a double beat: core EPS $2.26 (beat by $0.02) and revenue $29.34B (beat estimates, +5.6% YoY). Organic revenue grew 2.1%, driven by pricing/mix despite soft volumes in some areas. This followed a tougher 2025 overall but marked improvement, with reaffirmed 2026 outlook for modest growth. The board approved a 4% annualized dividend increase and $10B buyback, signaling confidence. Shares rallied post-earnings, recovering from prior weakness tied to consumer caution and input costs.
**Key Dividend Metrics** 🧾
📌 Forward Dividend Yield: ~3.43%
📌 Annual Dividend Rate: $5.69
📌 Payout Ratio: ~94-95% (on earnings; cash flow coverage tighter at ~100% in some metrics, but supported by strong FCF)
📌 Dividend Growth Streak: 54 years
📌 Latest Increase: 4% for 2026
📌 Next Quarterly Payment: $1.4225/share (ex-dividend March 6, 2026; payable March 31, 2026)
**Dividend Overview**: Attractive Yield with Proven Reliability
The forward yield of ~3.43% is solid for a Dividend King, though lower than 2025 peaks (when shares dipped). The payout ratio is elevated but typical for a mature, cash-generative company with limited reinvestment needs. PepsiCo prioritizes returns, backed by consistent cash generation and brand strength.
**Dividend Growth and Safety**: Steady and Dependable
Increases remain mid-single-digit (recent 4-7% range), outpacing inflation over time. Debt levels are manageable with strong FCF (~$8B+ levered TTM). Beta remains low (~0.4-0.5), offering stability. Institutional ownership is high, short interest low—fundamentals support ongoing safety.
**Cash Flow Statement**
TTM operating cash flow: ~$12.09B, supporting dividends, capex, and returns. Levered free cash flow: ~$8.23B (ample coverage for ~$5.69 annual dividend). The profile remains robust, with flexibility for buybacks and growth investments.
**Analyst Ratings**
Consensus: “Hold” (some “Moderate Buy” views), with ~20-30 analysts. Average 12-month target: ~$170 (modest ~2-3% upside from recent ~$166 levels; higher targets up to $191). Recent actions include price target lifts post-Q4 beat, reflecting improved momentum but tempered by macro/consumer headwinds.
**Earnings Report Summary** (Latest: Q4 2025)
Strong finish to 2025: Revenue +5.6% YoY to $29.34B (beat), core EPS +15% to $2.26 (beat). Full-year 2025 core EPS ~$8.14. Leadership highlighted productivity, pricing, and international strength offsetting North American softness. 2026 guidance: organic revenue +2-4%, core constant currency EPS +4-6%. Focus remains on cost control, innovation (e.g., natural ingredients), and global expansion.
**Chart Analysis**
Shares have rebounded sharply in early 2026 (up ~19% YTD in reports), trading around $165-167 recently (from 52-week lows near $128). Momentum has shifted positive post-Q4, with price above key moving averages in recent sessions. RSI and volume suggest renewed interest, though still monitoring for sustained breakout.
**Management Team**
CEO Ramon Laguarta (since 2018) drives strategy on innovation and efficiency. CFO and regional leaders support global execution. The team has navigated challenges effectively, prioritizing shareholder value.
**Valuation and Stock Performance**
Forward P/E ~19-20x (below historical averages), reflecting cautious sentiment but value appeal. YTD performance strong in 2026 after 2025 weakness; market cap ~$227B.
**Risks and Considerations**
Input cost inflation, consumer shifts to value/healthier options, currency headwinds, and competition persist. Regulatory/consumer preference changes (e.g., sugar taxes) remain factors. Execution on cost savings and growth will be key.
**Final Thoughts**
PepsiCo has rebounded with a strong Q4 2025 beat, dividend hike, and solid guidance—reinforcing its status as a reliable income play. While growth is modest, the combination of brand power, cash flow strength, and 54-year dividend streak makes it appealing for long-term, income-focused investors. The recent rally prices in much optimism, but fundamentals remain intact for steady returns.