Benzinga - by Priya Nigam, Benzinga Staff Writer.
PepsiCo Inc (NASDAQ: PEP) on Tuesday reported better-than-expected earnings for its third quarter.
The company posted third-quarter FY23 sales growth of 6.7% year-on-year to $23.45 billion, beating the analyst consensus estimate of $23.43 billion. Adjusted EPS of $2.25 beat the consensus estimate of $2.15.
PepsiCo continues to expect FY23 organic revenue growth of 10%. For FY23, the company now expects to deliver 13% core constant currency EPS growth (previously 12%). The company raised its FY23 adjusted EPS outlook from $7.47 to $7.54 versus the consensus of $7.49.
With PepsiCo reporting upbeat quarterly earnings, some investors may be eyeing potential gains from the company’s dividends. As of now, PepsiCo has a dividend yield of 2.94%, which is a quarterly dividend amount of $1.2650 a share ($4.83 a year).
To figure out how to earn $500 monthly from PepsiCo dividends, we start with the yearly target of $6,000 ($500 x 12 months).
Next, we take this amount and divide it by PepsiCo's $4.83 dividend: $6,000 / $4.83 = 1,242 shares
So, an investor would need to own approximately $204,185 worth of PepsiCo, or 1,242 shares to generate a monthly dividend income of $500.
Assuming a more conservative goal of $100 monthly ($1,200 annually), we do the same calculation: $1,200 / 4.83 = 248 shares, or $40,771 to generate a monthly dividend income of $100.
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Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.
The dividend yield is calculated by dividing the annual dividend payment by the current stock price. As the stock price changes, the dividend yield will also change.
For example, if a stock pays an annual dividend of $2 and its current price is $50, its dividend yield would be 4%. However, if the stock price increases to $60, the dividend yield would decrease to 3.33% ($2/$60).
Conversely, if the stock price decreases to $40, the dividend yield would increase to 5% ($2/$40).
Further, the dividend payment itself can also change over time, which can also impact the dividend yield. If a company increases its dividend payment, the dividend yield will increase even if the stock price remains the same. Similarly, if a company decreases its dividend payment, the dividend yield will decrease.
PEP Price Action: Shares of PepsiCo gained 1.9% to close at $164.40 on Tuesday.
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