Building a Dividend Stock Portfolio: PepsiCo's (PEP) Stability and Growth Potential

PepsiCo, Inc. (NASDAQ:PEP) is included among the Best Stocks for a Dividend Stock Portfolio.

PepsiCo, Inc. (NASDAQ:PEP) drew attention on Sept. 2 when activist investor Elliott Investment Management revealed a $4 billion position in the snack and beverage leader, representing about a 2% ownership stake.

Shares of PepsiCo, Inc. (NASDAQ:PEP) have slipped nearly 6% since the beginning of 2025, reflecting stalled earnings growth and limited momentum in recent quarters. Elliott’s move has fueled speculation, but the broader investment case hinges more on what the company could achieve going forward rather than its current performance. As a result, some investors may choose to remain cautious and adopt a wait-and-see stance.

In this environment, PepsiCo, Inc. (NASDAQ:PEP)’s dividend offers relief to income investors. The company is a Dividend King, having raised its dividends for 53 consecutive years. It currently offers a quarterly dividend of $1.4225 per share and has a dividend yield of 4.02%, as of September 18.

While we acknowledge the potential of PEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.