PepsiCo’s stock slumps as results offset raised dividend, new $15 billion buyback program

Shares of PepsiCo Inc. shed 1.2% in premarket trade Tuesday, as the beverages and snack giant’s raised dividend and new buyback program offset fourth-quarter results that showed another decline in beverage and snack sales. Pepsi said it will increase its annual dividend 15% to $3.71 a share from $3.22 a share, starting with the dividend to be paid in June 2018. The company also announced a new $15 billion stock repurchase program, starting July 1, 2018 and expiring June 30, 2021, replacing the $12 billion program that started on July 1, 2015. Based on Monday’s closing price of $111.93, the new annual dividend rate implies a dividend yield 3.14%, compared with the current 3.37% yield for rival Coca-Cola Co. and the implied yield of 1.92% for the S&P 500 , according to FactSet. Also at Monday’s stock closing price, the new buyback program would allow the company to repurchase 9.4% of the shares outstanding. Pepsi shares have lost 1.9% over the past three months while the S&P 500 has gained 2.8%.

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