PEP vs WMT: Dividend Comparison
Dividend data as of
Pepsico Inc (PEP) and Walmart Inc. (WMT) are both in the Consumer Staples sector, making them natural rivals for dividend investors. PEP offers a significantly higher 3.37% yield compared to WMT's 0.72%, a gap of 2.65%. Both stocks show similar dividend growth rates, each around 7.3% over the past five years. WMT holds the edge in dividend safety with a "Safe" rating. Both are classified as Dividend Aristocrats.
Verdict
Yield Analysis
PEP yields 2.65% more than WMT. In dollar terms, PEP pays $5.62/share vs WMT's $0.91/share annually.
Dividend Growth
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%.
WMT: Dividend growth is accelerating — the 3-year CAGR of 11.2% exceeds the 5-year rate of 6.4% and the 10-year rate of 3.9%.
Dividend Safety
PEP: The payout ratio of 94% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x.
WMT: The payout ratio of 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in PEP vs WMT today?
At $166.01 per share, $10,000 buys about 60.2 shares of Pepsico Inc (PEP). Each share pays $5.62 per year in dividends, so the position starts out generating roughly $339 per year — about $28 a month.
At $133.79 per share, $10,000 buys about 74.7 shares of Walmart Inc. (WMT). Each share pays $0.91 per year in dividends, so the position starts out generating roughly $68 per year — about $6 a month.
PEP is the larger income stream from day one: $270 per year more on the same $10,000 invested.
What could $10,000 of PEP or WMT income look like in 10 years?
Pepsico Inc (PEP) has raised its dividend about 7.3% a year over the past five years. If that pace held, the $337 per year that $10,000 generates today at the current 3.37% yield would reach $679 per year by 2036 — a 6.8% yield on the original cost.
Walmart Inc. (WMT) has raised its dividend about 6.4% a year over the past five years. If that pace held, the $72 per year that $10,000 generates today at the current 0.72% yield would reach $134 per year by 2036 — a 1.3% yield on the original cost.
On those trailing rates, PEP pays more in 2036: $679 versus $134 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would WMT's dividend growth overtake PEP's higher yield?
It doesn't, on the trailing numbers. Pepsico Inc (PEP) yields more today (3.37% vs 0.72%) and has also grown its dividend at least as fast (7.3% vs 6.4% a year over five years). Unless WMT accelerates its raises or PEP stumbles, WMT never closes the income gap — PEP wins on both current income and growth.
Can PEP and WMT afford their dividends?
Pepsico Inc (PEP) earns $5.99 per share against $5.62 paid out in dividends — 1.1x coverage (a 94% payout ratio).
Walmart Inc. (WMT) earns $2.86 per share against $0.91 paid out in dividends — 3.1x coverage (a 32% payout ratio).
WMT's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for PEP if earnings weaken.
Which fits an early-retirement income portfolio better, PEP or WMT?
For income you need right now, Pepsico Inc (PEP) leads: $100,000 invested today pays about $281 a month at the current 3.37% yield, versus $60 a month from Walmart Inc. (WMT) at 0.72%.
PEP also leads on dividend growth (7.3% vs 6.4% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: PEP has raised its dividend 27 consecutive years; WMT has raised its dividend 43 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $946/yr in PEP vs $144/yr in WMT by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
Track PEP and WMT in your portfolio
See your real income from both — forward projections, yield on cost, and dividend safety signals. Sync your brokerage free for 30 days, or track holdings manually on the free plan.
Frequently Asked Questions
Related Resources
Individual Stock Analysis
Dividend Tools
Track Your Dividends
More Comparisons
This tool is for educational and informational purposes only and does not constitute investment, financial, tax, or legal advice. Consult a licensed professional before making investment decisions.
Past performance does not guarantee future results. All projections are hypothetical estimates based on user-provided inputs and may differ materially from actual outcomes.
By using this tool you agree to our Terms of Service and Privacy Policy.