PepsiCo: A Big Dividend Payer For My Dividend Yield Passive Income Portfolio

Last Friday I put 20 PepsiCo shares into the Dividend Yield Passive Income Portfolio (DYPI). The total purchase amount was $1,422 which represents roughly 1.4 percent of the whole portfolio net worth.

PepsiCo is a global food and beverage company. It’s the second biggest soft drink producer and distributor in North-America (behind Coca Cola) and a Dividend Champion with 40 years of consecutive dividend growth.  Additionally, it owns a number of other businesses - ranging from fruit juices and other non carbonated drinks to bottled water and breakfast cereal. PepsiCo's most important division is its food products  division, which consists of Frito-Lay and Quaker Oats.

The DYPI-Portfolio was funded virtual with $100,000 on October 04, 2012. I like to show you with this experiment that you can make money with dividend stocks if you are a wise, disciplined and patient investor with a long-term investment horizon.

I have realized a double-digit return since I started investing money into stocks. I lost much money over years - that's part of the business. But I ever had stocks with a great total return that paid me off.

One of my trading accounts with the longest performance history shows that I made a six-figure gross income with stock trading over the recent decade. One third of my profits came from dividends and two third were capital gains.

Investing money into dividend stocks is no one-way strategy to trading success. It’s hard work and should give you fun. You should enjoy reading my blog and other stuff from the capital market. Educate yourself and create your own investment philosophy. Out there are so many investment opportunities to make money with.

I did it too and made big money. Today I live off dividend payments. My annualized dividend income is in a five-figure range.

Why did I put PepsiCo into the Dividend Yield Passive Income Portfolio?

Well my first thoughts were that I don’t have enough low beta stocks with a higher capitalization and a broader diversified business model. PepsiCo is not a cheap stock. The company has a current P/E ratio of 18.90 and the forward P/E is expected at 16.07. Earnings growth is weak for the time being. For the next year, earnings per share are expected to grow by 8.62 percent and for the next five years the growth is expected at 6.18 percent.

PepsiCo is a must have investment for a long-term dividend growth investor like me. I own the company personally despite the fact that the performance was very weak within the recent years. I hold roughly 2.79 percent of my full real net worth in the company. My biggest position is still Philip Morris with 6.87 percent portfolio share.

The PepsiCo stake will give me around $45 dividend income per year. The full portfolio dividend income is estimated at $800. I will put more stocks into the DYPI-Portfolio. As of now I own around 15 stocks and have still $78,926.55 in cash for further stock acquisitions.

At the end of the year 2013 the total number of shares in the portfolio should count 50 – 70. As a result, the yearly dividend income will grow to 3,000 – 4,000. For the upcoming 10 years, this amount should double. That's my aim!

What do you think about my thoughts? Is it possible? Is PepsiCo the right stock for the DYPI-Portfolio to achieve these goals? Please share your thoughts with me and leave a small comment below. I will reply you.

Here is the current portfolio:

Dividend Yield Passive Income Portfolio Overview (Click to enlarge)

These are the latest portfolio transactions:

Lastest Dividend Stock Buys Passive Income Portfolio (Click to enlarge)

Here is a snapshot of the 3 biggest companies including PepsiCo:

PepsiCo (NYSE:PEP) has a market capitalization of $109.64 billion. The company employs 297,000 people, generates revenue of $66.504 billion and has a net income of $6.462 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12.242 billion. The EBITDA margin is 18.41 percent (the operating margin is 14.48 percent and the net profit margin 9.72 percent).

Financial Analysis: The total debt represents 36.73 percent of the company’s assets and the total debt in relation to the equity amounts to 130.04 percent. Due to the financial situation, a return on equity of 30.66 percent was realized. Twelve trailing months earnings per share reached a value of $3.75. Last fiscal year, the company paid $2.02 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.88, the P/S ratio is 1.65 and the P/B ratio is finally 5.35. The dividend yield amounts to 3.03 percent and the beta ratio has a value of 0.45.

Long-Term Stock History Chart Of PepsiCo (PEP)

Long-Term Dividends History of PepsiCo (PEP)

Long-Term Dividend Yield History of PepsiCo (PEP)

Dr Pepper Snapple Group (NYSE:DPS) has a market capitalization of $9.38 billion. The company employs 19,000 people, generates revenue of $5.903 billion and has a net income of $605.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.231 billion. The EBITDA margin is 20.85 percent (the operating margin is 17.35 percent and the net profit margin 10.25 percent).

Financial Analysis: The total debt represents 29.17 percent of the company’s assets and the total debt in relation to the equity amounts to 119.66 percent. Due to the financial situation, a return on equity of 25.67 percent was realized. Twelve trailing months earnings per share reached a value of $2.92. Last fiscal year, the company paid $1.21 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.42, the P/S ratio is 1.59 and the P/B ratio is finally 4.23. The dividend yield amounts to 3.02 percent and the beta ratio has a value of 0.71.

Long-Term Stock History Chart Of Dr Pepper Snapple Group (DPS)

Long-Term Dividends History of Dr Pepper Snapple Group (DPS)

Long-Term Dividend Yield History of Dr Pepper Snapple Group (DPS)

Coca-Cola (NYSE:KO) has a market capitalization of $165.55 billion. The company employs 146,200 people, generates revenue of $46.542 billion and has a net income of $8.634 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12.596 billion. The EBITDA margin is 27.06 percent (the operating margin is 23.06 percent and the net profit margin 18.55 percent).

Financial Analysis: The total debt represents 35.72 percent of the company’s assets and the total debt in relation to the equity amounts to 90.31 percent. Due to the financial situation, a return on equity of 27.37 percent was realized. Twelve trailing months earnings per share reached a value of $1.92. Last fiscal year, the company paid $0.94 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.26, the P/S ratio is 3.56 and the P/B ratio is finally 5.28. The dividend yield amounts to 2.76 percent and the beta ratio has a value of 0.50.

Long-Term Stock History Chart Of Coca-Cola (KO)

Long-Term Dividends History of Coca-Cola (KO)

Long-Term Dividend Yield History of Coca-Cola (KO)

Kraft Foods Group Shares Are New In Our Dividend Yield Passive Income Portfolio

Kraft Foods Group (KRFT)
New Dividend Stock For The Passive Yield Income Portfolio

Last Friday I put 40 Kraft Foods Group shares into the dividend yield passive income portfolio (DYPI) at cost of $44.41 per share. The total amount was $1,778.

Kraft Foods is the major diversified food company within in the United States. Roughly 20% of sales are generated outside the United States.

The shares are weighted at 1.7% of the total yield income portfolio and they will generate an annualized dividend income of 76 bucks per year. The total income is now around $700 per year. My investment costs were $18,000 and the yield on cost is 3.68%.

The portfolio was funded with $100,000 virtual, 3 months before and has now 13 stock holdings. I tried to put every Friday one stock into the portfolio. The efforts are not very high. The stock has normally a strong brand and good dividends or something else that sells. Buy Big Dividend Stocks is one of the head points.

What I try to do is to invest money into mid-yielding stocks, stocks with a dividend yield of around 2-4%. It is hard to find stocks that pay a yield over 3% and have a high-quality and proven business model.

Because the portfolio is 1.45% down since I funded it, the current portfolio yield is 3.72%. That is a bad performance you would say. You are right for the time being. But the strategy is to buy slowly and over long period. Returns are realized over a long investment horizon and not over month and hours.

If you want to get quick rich you should avoid buying stocks, penny stocks high-yields or something else. You should play with the money in Las Vegas. Or start to work - Your payments per hour are much higher.

But this is not the philosophy of a smart investor. Wise investors invest their money into great companies with growth potential that is fairly priced. If you are an anxious investor, please put your money in value stocks with growth potential. Dividends will come from alone if your company is managed by trustful employees. Finally, the time brings the return.

Until the end of next year 2013, I like to increase the amount of stock holdings to 52 - 70 in total. This should be realistic. All I need to do is to buy one stock the week. If I should realize this, the full dividend income should be around $3,500 per year.

So why did I bought Kraft Foods shares for the dividend yield passive income portfolio?

There are several reasons for the buy. Kraft Foods manufactures and markets food and beverage products, including convenient meals, refreshment beverages and coffee, cheese and other grocery products, in the United States and Canada, under a stable of iconic brands. The Company's product categories span breakfast, lunch and dinner meal occasions, both at home and in foodservice locations. It sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, drug stores, gasoline stations, value stores and other retail food outlets in the United States and Canada.

The first reason is that the dividend yield is around 4.5%. That's a pretty high figure for a food company with great value and strong brands. In addition the new Kraft Foods Group is one of the biggest food players in North America. The company is nearly dept free and has enough potential to be a consolidation leader.

Kraft Foods Group generates roughly 2.6 billion cash from operating activities at 400 million capital expenditures. Calculated on this amounts I expect that the company will become around 4 billion in debt in order to finance further growth, repurchase own shares or even to increase dividends.

If we take a look at competitors like Heinz General Mills or Campbell Soup we could see that the evaluation is not cheap but also not expensive. The reason why KRFT shares are cheaper than the competitors is the low amount of dept.

The current P/E ratio from Kraft Foods is 13.53. Heinz has a P/E ratio of 17.94, General Mills P/E ratio is at 14.78 and Campbell Soup is traded at 14.65 times of earnings.

I've no idea how fast the company can grow in the near future. For the next five years, earnings per share are expected to grow by 6.3%. That's one of the top values from peer.

What do you think about Kraft Foods? So you believe in future of the company and was the spin-off into Kraft Foods Group and Mondelez a wise decision? Let me know and leave the comment in the box below.

Here is the full portfolio:

Sym	Name	P/E Ratio	Dividend Yield		Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	N/A	4.47		28.90	50	$64.00	$1,443.50
LMT	Lockheed Martin C	10.48	4.54		92.72	20	$83.00	$1,809.00
INTC	Intel Corporation	8.82	4.3		21.27	50	$43.50	$1,018.50
MCD	McDonald's Corpor	16.49	3.28		87.33	15	$43.05	$1,305.00
WU	Western Union Com	6.62	3.18		11.95	100	$42.50	$1,332.00
PM	Philip Morris Int	16.53	3.97		85.42	20	$65.58	$1,649.41
JNJ	Johnson & Johnson	22.76	3.45		69.19	20	$48.00	$1,389.00
MO	Altria Group Inc	16.2	5.47		33.48	40	$68.00	$1,240.40
SYY	Sysco Corporation	16.71	3.44		31.65	40	$43.20	$1,250.00
DRI	Darden Restaurant	12.7	4.19		46.66	30	$55.80	$1,333.49
CA	CA Inc.	11.06	4.59		21.86	50	$50.00	$1,085.50
PG	Procter & Gamble	18.7	3.29		68.72	25	$55.28	$1,677.75
KRFT	Kraft Foods Group	13.56	1.13		44.41	40	$20.00	$1,778.00
							$681.91	$18,311.55
							Average Yield	3.72%
							Yield On Cost	3.68%

Sysco: Dividend Idea Of The Week | Long-Term Dividend Growth Stock With 13.74% Upside

Weekly Dividend Stock Ideas Researched by The Dividend Yield Weekly. Our weekly dividend idea is the U.S. based foods wholesale company Sysco (SYY). 

Sysco Corporation (Sysco), along with its subsidiaries and divisions, is a North American distributor of food and related products primarily to the foodservice or food-away-from-home industry. The Company provides products and related services to approximately 400,000 customers, including restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. Sysco provides food and related products to the foodservice or food-away-from-home industry. It has aggregated its operating companies into a number of segments, of which only Broadline and SYGMA are the main segments. Broadline operating companies distribute a line of food products and a variety of non-food products to their customers. SYGMA operating companies distribute a line of food products and a variety of non-food products to chain restaurant customer locations. In May 2011, it acquired Goldberg & Solovy Foods, Inc. (G&S). On October 3, 2012, the Company acquired Keelings Foods. More on Reuters here.

Here is the full stock analysis report, also free for download:



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* I am long in SYY shares. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in other stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

The stock analysis, including the rating and up/down potential, is based on historical information and provided by several data provider like Thompson Reuters, Morningstar, GoogleFinance, YahooFinance and MSN. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Material presented here is for informational purposes only. Before buying or selling a security, you should do your own research and reach your own conclusion.

McDonald's (NYSE:MCD): Dividend Idea Of The Week - A Restaurant Leader With 3.55% Yield And 7.64% Upside Potential

Weekly Dividend Stock Ideas Researched by The Dividend Yield Weekly. Our weekly Dividend Idea is the leading restaurant operator and franchises company McDonald's (NYSE:MCD). McDonald's owns and franchises its restaurants all over the world. By the end of 2011, the company had 33,510 restaurants in 119 countries, of which 27,075 were operated by franchisees and 6,435 were operated by the company. McDonald’s menu includes hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, Snack Wraps, French fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafe beverages and other beverages. More on Reuters here. 

MCD operates a proven business model with a well diversifed global structure. The company is a strong established Dividend Champion and raised dividends over a period of 36 consecutive years with a double-digit long-term growth rate. Morningstar estimates the fair value of the company at $94.0, an upside potential of 7.64% compared to the previous close price of $87.33.

We like the strong brand and consumer focus of McDonald's. The huge cash flow of $7.1 billion allows the company to pay $2.6 billion dividends and to repurchase $3.0 billion own shares as of fiscal year 2011. Roughly $2.7 billion were used for CAPEX. 

The Best Dividends From Agricultural Chemical Companies

The Best Yielding Agricultural Chemical Companies Researched By Dividend Yield - Stock, Capital, Investment. The chemical industry is a cyclic and growing sector of the economy. A specialized industry with lower volatility is the agricultural chemical industry. Sixteen companies are classifiable to the sector. They all have a total market capitalization of around USD 200 billion. The average P/E ratio of the agri-chemicals amounts to 19.3 and they have a dividend yield of 1.8 percent. Only eight of them pay dividends but half of the dividend stocks are recommended to buy.

Best Yielding Food Wholesale Stocks

Food Wholesale Stocks With Best Dividends by Dividend Yield - Stock, Capital, Investment. Here is a current sheet of stocks from the food wholesale industry with best dividends. 9 stocks are classifiable to the industry of which 5 pay dividends and 3 yielding above 2 percent.

Here is the table with some fundamentals:

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Best Yielding Food Wholesale Stocks (Click to enlarge)

Take a closer look at the full table. The average price to earnings ratio (P/E ratio) amounts to 12.1 while the forward price to earnings ratio is 10.6. The dividend yield has a value of 2.2 percent. Price to book ratio is 1.5 and price to sales ratio 0.2. The operating margin amounts to 2.8 percent.

Related stock ticker symbols:

SYY, NAFC, CORE, SPTN, DIT

Selected Articles:

· Best Yielding Drugs Wholesale Stocks

· 5 Electronic Wholesalers With Highest Dividend-Yield

· Biggest Players In Major Diversified Foods Industry

· Dividend Stock Idea of the Day – Associated British Foods (LON:ABF)

· 4 Major Diversified Food Companies For Your Portfolio