There Are Only a Handful of Nasdaq-100 Stocks That Yield Over 3%. Here's My Top Pick to Buy in September.

PepsiCo offers a 4.3% dividend yield, well above the S&P 500's roughly 1.0% yield and the consumer staples sector's 2.1% average, while maintaining a 54-year dividend-growth streak. Q2 2026 organic sales increased 2.4%, trailing Coca-Cola's 6%, but EPS rose 4% year over year to $2.20. The article views the stock's weakness—driven by changing health preferences and GLP-1-related food-consumption shifts—as a long-term buying opportunity while PepsiCo refreshes its brand portfolio.

Analysis

PEP's valuation support rests on income-oriented ownership, but the relevant question is whether its yield reflects a temporary execution gap or a structurally lower terminal growth rate. The snack portfolio has greater exposure than KO to GLP-1-adjacent portion reduction and health-driven trade-down, while its broader distribution footprint creates more reformulation, marketing, and SKU-rationalization costs. That makes a revenue stabilization period potentially margin-dilutive rather than immediately accretive, limiting multiple recovery over the next 1-3 quarters.

KO is the cleaner relative beneficiary: its narrower beverage mix, higher concentrate economics, and superior recent organic-growth execution should sustain a quality premium if consumer staples flows remain defensive. PEP's ability to close the growth gap depends less on brand acquisitions than on whether innovation can produce velocity gains without incremental promotional spending; acquisitions alone risk adding leverage while buyback capacity is constrained by dividend commitments.

The contrarian opportunity is that low expectations can make PEP investable if North American snack volumes inflect before reported sales accelerate. A credible catalyst over 6-18 months would be evidence that price/mix no longer masks volume weakness, paired with stable gross margin and no deterioration in payout coverage. Conversely, a further widening of PEP's growth differential versus KO, or a guidance reset tied to volume and promotional intensity, would indicate the yield is compensation for an impaired earnings trajectory rather than an entry point.

Key Decisions for Investors

• Maintain a 1-3 month quality pair: long KO / short PEP in equal dollar amounts. The trade captures divergent execution and margin resilience; reassess if PEP reports two consecutive quarters of organic-growth acceleration or KO's organic growth falls below PEP's.
• Do not initiate an outright PEP income position until volume, not price/mix, improves in the core North American snacks business. Use the next earnings release as the decision point; require stable gross margin and dividend/payout coverage commentary before buying.
• For a 6-18 month value watch, accumulate PEP only after a post-earnings selloff caused by near-term investment spending rather than a demand reset, with sizing capped given structural GLP-1 uncertainty. Thesis fails on reduced full-year EPS guidance driven by persistent volume declines or a material increase in net leverage.
• Monitor GLP-1 prescription growth and PEP category scanner data as leading indicators. If snack velocity weakens while promotional activity rises, increase the KO/PEP relative long; if better-for-you innovation improves PEP velocity without margin erosion, cover the PEP short.