PepsiCo Stock Pays Out $38 Bil – Investors Take Note
In the last five years, PepsiCo (PEP) stock has returned $38 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, PEP stock has returned the 42nd highest amount to shareholders in history.
| PEP | S&P Median | |
|---|---|---|
| Dividends | $34 Bil | $3.0 Bil |
| Share Repurchase | $4.6 Bil | $3.0 Bil |
| Total Returned | $38 Bil | $6.0 Bil |
| Total Returned as % of Current Market Cap | 18.0% | 16.7% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Top 10 Stocks By Total Shareholder Return
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $514 Bil | 13.5% | $75 Bil | $439 Bil |
| GOOGL | $296 Bil | 7.7% | $17 Bil | $279 Bil |
| MSFT | $223 Bil | 8.0% | $105 Bil | $118 Bil |
| JPM | $176 Bil | 20.9% | $71 Bil | $105 Bil |
| META | $159 Bil | 10.3% | $10 Bil | $149 Bil |
| XOM | $152 Bil | 22.9% | $79 Bil | $73 Bil |
| BAC | $125 Bil | 32.6% | $45 Bil | $80 Bil |
| CVX | $112 Bil | 29.1% | $57 Bil | $55 Bil |
| WFC | $105 Bil | 39.7% | $22 Bil | $83 Bil |
| NVDA | $96 Bil | 2.2% | $3.0 Bil | $93 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for PEP. (see Buy or Sell PepsiCo Stock for more details)
PepsiCo Fundamentals
- Revenue Growth: 2.3% LTM and 2.9% last 3-year average.
- Cash Generation: Nearly 8.2% free cash flow margin and 14.4% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for PEP was 0.4%.
- Valuation: PepsiCo stock trades at a P/E multiple of 25.7
| PEP | S&P Median | |
|---|---|---|
| Sector | Consumer Staples | – |
| Industry | Soft Drinks & Non-alcoholic Beverages | – |
| PE Ratio | 25.7 | 24.3 |
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| LTM* Revenue Growth | 2.3% | 6.8% |
| 3Y Average Annual Revenue Growth | 2.9% | 5.5% |
| Min Annual Revenue Growth Last 3Y | 0.4% | 0.4% |
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| LTM* Operating Margin | 14.4% | 18.6% |
| 3Y Average Operating Margin | 14.2% | 18.1% |
| LTM* Free Cash Flow Margin | 8.2% | 14.2% |
*LTM: Last Twelve Months
The table gives a good overview of what you get from PEP stock, but what about the risk?
PEP Historical Risk
PepsiCo isn’t immune to big drops. It fell about 40% during the Global Financial Crisis, 26% in the Dot-Com Bubble, and nearly 29% through the Covid pandemic. Even smaller shocks like 2018’s correction and the recent inflation bout pushed it down around 18-20%. Solid fundamentals matter, but when the market sells off hard, even steady stocks like PEP take a hit.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.