New York, Mar 31: Bowing to pressure from investors, PepsiCo Inc. said it will boost its dividend 44 percent and substantially increase stock buybacks. The moves announced yesterday, after the stock market closed, will increase the beverage and snack-food giant's annual dividend to 92 cents a share from 64 cents a share. The new dividend is expected to go into effect in June. The board also authorized repurchasing as much as $7 billion of common stock over the next three years. The company's current $5 billion repurchase program, begun in August 2002, will be finished soon.
Investors and analysts have been calling on the Purchase, New York, company to boost its dividend and bring it more in line with what other consumer-product companies pay out.
Before the change, PepsiCo's dividend yield was 1.2 percent at Monday's close of $52.21 on the New York Stock Exchange.
This move would push the company's dividend to 1.8 percent. Rival Coca-Cola Co., Atlanta, has a dividend yield of 2 percent and several other food companies have yields over 2 percent.
Bureau Report