PEP vs SYY: Dividend Yield, Growth & Safety Comparison
Pepsico Inc (PEP) and Sysco Corp (SYY) are both in the Consumer Staples sector, making them natural rivals for dividend investors. PEP edges ahead on yield at 3.37% versus SYY's 2.43%. For dividend growth, SYY leads with a 5-year CAGR of 10.9% versus PEP's 7.3%. SYY holds the edge in dividend safety with a "Safe" rating. PEP is a Dividend Aristocrat with 27 years of consecutive increases.
Key Metrics Comparison
| Metric | PEP | SYY |
|---|
| Dividend Yield | 3.37% | 2.43% |
| Annual Dividend | $5.62 | $2.13 |
| 5-Year CAGR | 7.3% | 10.9% |
| Payout Ratio | 94% | 57% |
| Consecutive Years | 27 | 0 |
| Price | $166.01 | $90.70 |
Yield Comparison
Pepsico Inc (PEP) currently yields 3.37%, which is solid for the broader market. That's 0.94% more than Sysco Corp (SYY), which yields 2.43%. In dollar terms, PEP pays $5.62/share annually versus SYY's $2.13/share.
Dividend Growth
Over the past five years, SYY has grown its dividend at a 10.9% CAGR compared to PEP's 7.3%. PEP: Dividend growth is slowing — the 3-year CAGR of 6.6% trails the 5-year rate of 7.3% and the 10-year rate of 7.4%. SYY: Dividend growth is accelerating — the 3-year CAGR of 18.7% exceeds the 5-year rate of 10.9% and the 10-year rate of 9.5%.
Dividend Safety
PEP's dividend safety is rated "At Risk." The payout ratio of 94% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x. SYY's dividend safety is rated "Safe." The payout ratio of 57% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x. SYY's payout ratio of 57% is more conservative than PEP's 94%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in PEP generates approximately $337/year in dividend income, compared to $243/year from SYY — a difference of $94/year. At $100,000, that gap widens to $940/year.
Verdict
- Best for income: PEP
- Best for growth: SYY
- Best for safety: SYY
Frequently Asked Questions
Which has a higher dividend yield, PEP or SYY?
Pepsico Inc (PEP) has a higher dividend yield of 3.37% compared to Sysco Corp (SYY) at 2.43%.
Is PEP or SYY a better dividend growth stock?
Sysco Corp has the stronger dividend growth with a 5-year CAGR of 10.9%, compared to Pepsico Inc's 7.3%.
Which is safer for dividend income, PEP or SYY?
Pepsico Inc's dividend safety is rated "At Risk" while Sysco Corp is rated "Safe." The payout ratio of 94% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x. The payout ratio of 57% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x.
How much income does $10,000 in PEP vs SYY generate?
A $10,000 investment in PEP generates approximately $337/year in dividends, while the same amount in SYY generates about $243/year.
Is PEP or SYY a Dividend Aristocrat?
Pepsico Inc is a Dividend Aristocrat with 27 consecutive years of increases. Sysco Corp does not currently qualify for aristocrat status.
Which has a lower payout ratio, PEP or SYY?
Sysco Corp has a lower payout ratio of 57% compared to Pepsico Inc's 94%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
PEP vs SYY: which is better for retirement income?
It depends on your priorities. PEP for current income, SYY for dividend growth, SYY for safety. Many retirement investors hold both for diversification.
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