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 roughly 4.3% dividend yield, well above the S&P 500's approximately 1.0% yield and the consumer staples sector average of 2.1%, following share-price weakness. Q2 2026 organic sales grew 2.4%, trailing Coca-Cola's 6.0%, while EPS rose 4% year over year to $2.20. The article argues PepsiCo's 54-year dividend-growth streak, portfolio diversification, and efforts to adapt to health-conscious consumption and GLP-1-related eating changes support a favorable long-term risk/reward profile.

Analysis

PEP’s valuation discount is unlikely to close simply because the dividend is high: the market is underwriting a multi-quarter reset in volume/mix and brand-investment returns. The key competitive issue is that PEP’s snack exposure creates greater sensitivity to GLP-1 adoption, private-label trade-down, and health-oriented reformulation costs than KO’s concentrate-led model. That makes KO the cleaner near-term defensive beverage exposure, while PEP needs evidence that innovation is producing incremental household penetration rather than merely protecting shelf space through promotions.

Over the next 1-3 months, scanner-data trends, North American convenient-food volumes, and management commentary on price/mix versus unit volume will matter more than headline organic-sales growth. A sustained dividend yield premium can become self-reinforcing if slower growth forces elevated promotional spending, constraining margin recovery and buyback capacity. Conversely, a sequential volume inflection would matter disproportionately because PEP’s current multiple already embeds a weak operating trajectory.

The non-consensus angle is that GLP-1 risk may be more manageable for packaged-food demand than feared, but only if penetration remains concentrated in higher-income consumers and reduced calorie consumption does not translate into reduced snacking occasions broadly. The larger 6-18 month risk is regulatory and retailer pressure around sodium, sugar, and ultra-processed foods, which could require portfolio renovation and raise input/marketing costs across PEP, KHC, MDLZ, and HSY. PEP is a value-and-income watchlist name, not yet a clear catalyst long without proof of volume stabilization.

Key Decisions for Investors

• Maintain a 1-3 month defensive pair: long KO / short PEP in equal dollar amounts. KO offers cleaner exposure to beverage pricing and less packaged-food/GLP-1 uncertainty; exit if PEP reports two consecutive quarters of improving North American unit volumes or if the relative spread reverses 8-10% from entry.
• Set an alert to initiate PEP only after independently tracked U.S. beverage and convenient-food volumes turn positive sequentially and management maintains full-year margin guidance. Target a 6-18 month total-return profile driven by yield plus multiple normalization; invalidate on a dividend-growth slowdown, margin-guide cut, or renewed volume deterioration.
• For staples exposure, avoid treating yield as downside protection: cap PEP position sizing until net debt/EBITDA, payout ratio, and buyback cadence are reviewed against KO and MDLZ. The missing data are leverage trajectory and incremental promotional spending, both necessary to assess whether capital returns can remain durable.
• Watch GLP-1 prescription growth and food-retail scanner data monthly. Accelerating prescription penetration alongside worsening salty-snack volumes would favor underweight PEP and potentially a relative long in KO; stable snack volumes despite prescription growth would challenge the market’s structural-demand concern.