Motley Fool contributor Leo Sun favors Coca-Cola and Altria over PepsiCo among three Dividend Kings, and says he would avoid PepsiCo despite its 4.6% forward yield. He cites Coca-Cola's asset-light model and Altria's move into smoke-free products.
Dividend Kings have raised dividends for at least 50 straight years; Coca-Cola, Altria and PepsiCo have streaks of 64, 57 and 54 years, respectively. Analysts cited by Sun project annualized EPS growth from 2025 to 2028 of 7% for Coca-Cola, 13% for Altria and 14% for PepsiCo. Their forward yields are 2.4%, 6.5% and 4.6%, respectively, with trailing payout ratios of 62%, 89% and 75%. Altria expects smoke-free products to generate at least $5 billion in revenue by 2028, nearly a quarter of projected sales.
Sun argues PepsiCo is less attractive because bottling its own drinks requires more capital than Coca-Cola's concentrate-and-syrup model, while its packaged-food brands face competition from healthier and private-label products, inflation, shifting health trends and increased GLP-1 drug use. Quaker Foods recalls added pressure; North America generates over half of PepsiCo's operating profits. The stock trades at 15 times forward earnings.
