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PepsiCo’s dividend yield is 3.85%, while Coca-Cola’s dividend yield is 2.84%
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Its dividend is growing much faster than Coca-Cola.
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PepsiCo also has better cash flow metrics than its largest rivals.
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10 stocks we like better than PepsiCo ›
I like dividend stocks. I’m not talking about stocks that happen to pay dividends, because that’s usually a nice bonus, but that’s not the main reason you own it. Rather, I’m referring to stocks that have a fairly stable share price that you hold in order to collect your dividend checks.
They are the ultimate set-and-forget investment that you can hold forever with little to no stress and very low risk. This is especially true if the company has a long history of increasing its dividend every year.
Investors can buy some stocks, set up a dividend reinvestment plan (DRIP), and let your returns compound for as long as you like.
and Pepsi (NASDAQ:PEP) is one of the best dividend stocks to add to your portfolio now and hold until at least the end of the decade.
“Is the Pepsi OK?” is probably a question that waiters at restaurants across the country are tired of asking.
Indeed, Pepsi-Cola’s eternal rival Coca Cola (NYSE:KO) In the United States and much of the world, it has become synonymous with soda.
But no matter your soft drink preference, PepsiCo is a better choice for your income portfolio, and not just because its 3.85% yield is significantly better than Coca-Cola’s 2.84% yield.
Coca-Cola and PepsiCo are dividend stocks through and through. Neither company is growing very fast. They are very mature as a company. But PepsiCo’s dividend is much stronger than its competitors.
The first is yield, which I already mentioned. However, while Coca-Cola has had a longer streak of dividend growth at 63 years compared to PepsiCo’s 53 years, PepsiCo’s dividend has been growing at a much faster rate. Both are Dividend Kings, companies that have increased their dividends for 50 consecutive years or more.
Over the past three years, PepsiCo’s dividends have grown at a compound annual growth rate (CAGR) of 7.51%, while Coca-Cola’s dividends have grown at a compound annual growth rate (CAGR) of 5.04%. Over the past five years, Pepsi-Cola has grown at a compound annual growth rate of 6.93%, ahead of Coca-Cola’s 4.46%.
In addition, PepsiCo’s operating cash flow in the first nine months of 2025 was US$5.4 billion, which was better than Coca-Cola’s US$2.4 billion. In the first nine months of 2025, PepsiCo paid $5.6 billion in dividends and Coca-Cola paid $4.3 billion.
Now, while both companies pay out more in dividends than they generate operating cash flow, PepsiCo pays out just $200 million, while Coca-Cola pays out $1.9 billion more in dividends than it generates operating cash flow. This makes PepsiCo’s prospects safer, but PepsiCo can’t afford to stay this way for much longer. This is a risk shared by both stocks, but PepsiCo’s risk is much lower than that of its competitors.
