3. PepsiCo, Inc. (NASDAQ:PEP)
Bridgewater Associates’ Stake Value: $511,811,443
Dividend Yield as of May 17: 2.62%
PepsiCo, Inc. (NASDAQ:PEP) is a New York-based food, beverage, and snack company. At the end of the first quarter of 2023, Bridgewater Associates had over 2.8 million shares in the company, valued at $511.8 million. The company represented 3.12% of the hedge fund’s portfolio.
PepsiCo, Inc. (NASDAQ:PEP), one of the top dividend stock picks of billionaire Ray Dalio, hiked its quarterly dividend by 10% on May 2 to $1.265 per share. This marked the company’s 51st consecutive year of dividend growth. The stock’s dividend yield on May 17 came in at 2.62%.
As of the close of Q4 2022, 70 hedge funds in Insider Monkey’s database owned stakes in PepsiCo, Inc. (NASDAQ:PEP), worth over $4.4 billion collectively. Among these hedge funds, Fundsmith LLP was the company’s largest stakeholder in Q4.
Lindsell Train mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q3 2022 investor letter. Here is what the firm has to say:
“At this point, it may help to give a further example of these self-reinforcing moats to illustrate the idea, drawing from the consumer franchises side of our portfolio. In our view, strong consumer brands can similarly exhibit Lindycompatible anti-ageing properties. Consider, that the longer a company invests in its brands through advertising and R&D, the stronger and more resonant they may get. When successful, a self-sustaining feedback loop is established, whereby it becomes ever harder to recreate a heritage-rich brand from scratch, raising barriers to entry, and proportionately increasing its likely lifespan. There are plenty of long-lived portfolio franchises I could reference here, but I’ve gone with PepsiCo (NYSE:PEP); partly because we have good time-series stats on it (beware data bias!) but also, as I hope will become evident, because Pepsi over its 129 years has succeeded in creating some wonderfully deep moats.
With Pepsi Cola you get the flagship soft drinks brand, which is both global and generational, but you also get the Frito-Lay salty snacks portfolio assembled alongside it, claiming nearly 40% of the global market. That’s ten-times greater than the nearest competitor and likely higher than the next 65 competitors combined. These are exceptionally strong global bands with market shares to match; the long-term empirical result being Pepsi’s dividend record which over the past 66 years (as far back as we’ve been able to go) has compounded at an annualised rate of 10%. Pepsi is no ‘in at the ground floor’ start-up today, but it wasn’t six decades ago either. Early growth investor Philip Fisher put it well when in 1958 (two years into Pepsi’s current winning streak) he wrote of “companies which in spite of outstanding prospects of major further growth are so financially strong, with roots going so deep into the economic soil, that they qualify under the general classification of ‘institutional stocks’”. PepsiCo fits this description well…” (Click here to see the full text)
