PepsiCo (PEP)

Jul 18, 2022Trade Ideas

With inflation, fears of recession, and a potential 100 bps rate hike on the table, investor nerves are shot. It’s why many are turning to strong dividend stocks. After all, “Investing in companies with a strong track record of paying — and increasing — dividends can lead to stable cash flow even during recessions,” says Nerd Wallet.

One to consider is PepsiCo (PEP) – one of the most consistent dividend-paying companies in the market. In fact, its latest quarterly dividend of $1.15 per share was its 50th increase. Even better, earnings continue to be strong. In its second quarter, EPS came in at $1.86, which was above expectations for $1.74. Revenue came in at $20.23 billion, which was above expectations for $19.51 billion.

“That outperformance has come as investors, worried about consumer spending given high inflation and a potential recession, have favored so-called haven stocks such as consumer staples,” says Barron’s. Also, if PEP can break above prior resistance around $176.18, the stock could test higher highs. PEP currently has a dividend yield of 2.69%.

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