1 Dividend Growth Stock Down 20% to Buy Right Now

Group 1: Company Overview - PepsiCo is a consumer staples company that produces affordable products, fostering consumer loyalty even during economic downturns [2][3] - The company has a diverse product range, including beverages, snacks under the Frito-Lay brand, and packaged foods through Quaker Oats, making it a dominant player in both beverages and salty snacks [3][4] - PepsiCo operates in over 200 countries, supported by a strong distribution system and marketing capabilities [4] Group 2: Investment Opportunity - Currently, PepsiCo's stock is down nearly 23% from its May 2023 highs, presenting a potential buying opportunity for dividend growth investors [1][7] - The company offers a historically high dividend yield of 3.5%, backed by 52 consecutive annual dividend increases, indicating a strong business model [5][6] - Traditional valuation metrics, such as price-to-sales and price-to-earnings ratios, are below their five-year averages, suggesting that PepsiCo is undervalued [7] Group 3: Current Challenges - PepsiCo is experiencing a slowdown in top-line growth following aggressive price hikes during the pandemic, a trend affecting many peers in the industry [9] - The company faces potential demand impacts from new weight loss drugs and increased health consciousness among consumers, particularly due to its focus on beverages and snacks [11] - Management has indicated that organic sales growth will be low-single-digit and earnings growth mid-single-digit through 2025, leading to expectations of slower recovery [13] Group 4: Future Outlook - Despite current challenges, PepsiCo has a history of overcoming difficult periods and is already taking steps to improve performance, such as acquiring Siete Foods [10][11] - The long-term outlook remains positive, as low-single-digit growth could indicate potential for stronger performance once the company stabilizes [14]