I opened a new position with the purchase of PepsiCo Inc. (PEP)
14 shares @ $105.20 on 10/15/2018.
This increases my forward 12-month dividend income by $57.94 to a total of $6,611.96
I also updated my portfolio page to reflect the change.
My Thoughts
This is one company that I am very excited to be able to pick up some shares to fair to slightly undervalued price. I have been on the sidelines watching PepsiCo continue to raise its earnings and dividends as a result of that, its share price. However, with the recent market downturn, I was able to open a nice little position in this company with the purchase of 14 shares.
I do plan to buy more shares as I would like Pepsi to be one of my core holding for my portfolio.
PepsiCo has been increasing dividends for the past 46 years. That is outstanding. Another great fact is that the company 10-year dividend growth rate and 5-year growth rate is 8.9% and 8.5% respectively. So not only has the company been increasing its dividend for the past 46 years, but it has been increasing it at a very respectable rate.
The good news is that that rate for the foreseeable future looks like it will continue. For example, The most recent increase was a whopping 15.22%, and CFRA expects an 8% earnings growth for the next three years.
Based on 2017 adjusted earnings of $5.23, the company sported a dividend payout ratio of 61%. Earnings are predicted to be higher this year and next year. 2018 adjusted earning is expected to come in at $5.65 and in 2019 $5.97. This will translate to a higher stock price as well as increased dividends.
PEP is fairly valued, and I recommend it as a HOLD at this time. I have a fair value price at $109.83. This means that PEP is 1.2% Overvalued Based on today’s price of $111.17 (11/2/2018).
Like I said above, I would love to buy more shares and make PepsiCo a core holding. I love to see it under $105 share.
Source: Fastgraphs.com
What do you think of the company? Plan on owning it or already do? or why not?
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Love the purchase. That’s a smart move to add a company like Pepsi when the market freaks out. When the market drops, I am always on the hunt for the amazing Dividend Aristocrats that typically trade at a premium. PEP is in that class for me. I was able to add some earlier in the year then the price dropped in the second quarter. But Man I would love to get more around $100!
Bert
Thank Bert! I too would have loved to buy more. I want PEP to be a core holding for my portfolio. Hopefully, it comes back down so we both can pick up some more!! 😀
Thanks for sharing..
Thank you for reading and commenting!