PURCHASE, New York, September 6, 2026, 3:07 p.m. EDT — PepsiCo Inc. NASDAQ:PEP ended Friday at $137.63. Its $5.92 annual dividend now yields 4.30%. A 30-year Treasury yields 5.24%.
That 94-basis-point shortfall changes the defensive-stock pitch. New buyers accept less starting income, so dividend growth and share-price gains must earn back the difference.
The stock has already become cheaper. It lost 1.7% Friday and stands 14.4% below its March 5 close. U.S. cash markets are closed Sunday.
Current chart
The higher yield arrived through a lower share price
Price return excludes dividends. Source: Yahoo Finance historical data.
The comparison is unusually stark. Friday’s official Treasury curve put the 10-year yield at 4.78%. Even that shorter bond offered 48 basis points more income.
Income race
PepsiCo starts behind both benchmark Treasuries
Treasury yields are from the official Sept. 4 curve. PepsiCo yield uses the latest declared annual rate and closing price.
The securities promise different things. Treasury coupons and principal carry the U.S. government’s backing. PepsiCo’s board can change its dividend, while shareholders retain business growth and equity upside.
PepsiCo raised the annual rate 4% this year. Its latest $1.48 quarterly payment is due September 30. The company has increased its annual dividend for 54 straight years.
Five more 4% increases would take the annual dividend near $7.20. At today’s share price, that 5.23% yield on cost roughly catches Friday’s 30-year yield.
Catch-up clock
Five 4% raises would nearly close today’s yield gap
Now
$5.92
Year 1
$6.16
Year 2
$6.40
Year 3
$6.66
Year 4
$6.93
Year 5
$7.20
Annual dividend scenario assumes 4% yearly growth and an unchanged $137.63 purchase price. It excludes taxes and reinvestment. It is an illustration, rather than company guidance.
Waiting five years carries real uncertainty. A bond locks its coupon, while PepsiCo’s board sets each future payment and the share price keeps moving.
The business has some room to deliver. Second-quarter revenue rose 6.4% to $24.18 billion. Organic revenue increased 2.4%, while core earnings per share gained 4%.
Chief Executive Ramon Laguarta said global organic volume had risen “at the highest rate since 2022” year to date. North American beverages remained weaker. Their second-quarter volume fell 4%.
Core operating margin slipped 40 basis points to 16.8%. Management kept its 4%–6% core constant-currency EPS growth range and expects $7.9 billion of dividends this year.
Price alone could close the income gap faster. A $5.92 dividend yields 5.24% near $112.98, which sits 17.9% below Friday’s close.
Risks: Treasury yields can fall before PepsiCo compounds its payout. Inflation can also lift input costs and pressure margins. Dividend income and bond coupons receive different tax treatment across accounts.
PepsiCo still offers a growing claim on a global consumer business. Yet the bond market has raised the entry test, leaving patience to supply nearly one percentage point.
