PepsiCo: Too Pricey?

PepsiCo Inc. (NYSE:PEP) is a giant in the consumer staples space. For fiscal year 2015 PepsiCo managed to sell $63 B worth of beverages and snacks. There's 22 brands under PepsiCo's corporate umbrella that each generate over $1 B in annual sales. That's carbonated soft drinks, orange juice, tea, coffee, chips and more.

In February of this year the Board of Directors approved an increase to the quarterly dividend of 7.1% to $0.7525. PepsiCo is firmly implanted as a Dividend Champion and has a 44 year streak of growing dividends to investors.

Every $1 invested in PepsiCo 10 years ago has compounded at a 8.6% rate and is now worth $2.28. Every $1 invested 20 years ago is worth $5.27 good for 8.7% annual growth. Stretch it back to an investment 30 years ago and it's compounded at a 13.3% rate and is now worth $42.85.

I initiated a position in the company in late 2013 and since that time I've received 3 dividend increases growing my income from those first shares by 32.6%. Through the closing price from March 28th, $100.98, I've earned a 14.0% internal rate of return on my PepsiCo investment. So I'm more than pleased with the results I've had with investing in PepsiCo.

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