Defensive Strategies Amid Inflation and Rate Uncertainty in Stock Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Fool
- Dividend Kings Performance: PepsiCo has increased its dividends for 54 consecutive years, currently yielding 3.9%, and its diverse portfolio of beverages and snacks is expected to drive revenue growth, especially as the global snack market is projected to rise from $719 billion in 2024 to $922 billion by 2030.
- Utility Stability: Black Hills, a utility stock, has raised its dividends for 56 years with a current yield of 3.7%, and plans to merge with NorthWestern Energy Group, which would expand its customer base to over 2 million, further solidifying its market position.
- Strong Sales Performance: Colgate-Palmolive reported $5.3 billion in net sales for Q1 2026, marking its fourth consecutive quarter of record sales, and despite facing rising packaging and material costs, its 63-year history of dividend increases demonstrates its resilience to uncertainty.
- Market Defensive Strategies: Amid rising inflation and interest rate uncertainty, investors are leaning towards companies with stable dividends to protect their portfolios, making PepsiCo, Black Hills, and Colgate-Palmolive ideal choices due to their strong dividend records, providing a safety margin during market fluctuations.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy PEP?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on PEP
Wall Street analysts forecast PEP stock price to rise
12 Analyst Rating
6 Buy
6 Hold
0 Sell
Moderate Buy
Current: 146.290
Low
144.00
Averages
161.90
High
172.00
Current: 146.290
Low
144.00
Averages
161.90
High
172.00
About PEP
PepsiCo, Inc. is a global beverage and convenient food company. The Company’s segments include PepsiCo Foods North America (PFNA), PepsiCo Beverages North America (PBNA), International Beverages Franchise (IB Franchise), Europe, Middle East and Africa (EMEA), Latin America Foods (LatAm Foods), and Asia Pacific Foods. PFNA segment includes all of its convenient food businesses in the United States and Canada. PBNA segment includes all of its beverage businesses in the United States and Canada. IB Franchise segment includes its international franchise beverage businesses, as well as its SodaStream business. EMEA segment includes its convenient food businesses and beverage businesses with Company-owned bottlers in Europe, the Middle East and Africa. LatAm Foods segment includes all of its convenient food businesses in Latin America. Asia Pacific Foods segment consists of its convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Defensive Strategies Amid Inflation and Rate Uncertainty in Stock Market
- Dividend Kings Performance: PepsiCo has increased its dividends for 54 consecutive years, currently yielding 3.9%, and its diverse portfolio of beverages and snacks is expected to drive revenue growth, especially as the global snack market is projected to rise from $719 billion in 2024 to $922 billion by 2030.
- Utility Stability: Black Hills, a utility stock, has raised its dividends for 56 years with a current yield of 3.7%, and plans to merge with NorthWestern Energy Group, which would expand its customer base to over 2 million, further solidifying its market position.
- Strong Sales Performance: Colgate-Palmolive reported $5.3 billion in net sales for Q1 2026, marking its fourth consecutive quarter of record sales, and despite facing rising packaging and material costs, its 63-year history of dividend increases demonstrates its resilience to uncertainty.
- Market Defensive Strategies: Amid rising inflation and interest rate uncertainty, investors are leaning towards companies with stable dividends to protect their portfolios, making PepsiCo, Black Hills, and Colgate-Palmolive ideal choices due to their strong dividend records, providing a safety margin during market fluctuations.
See More
Defensive Investments Amid Market Rally Concerns
- Importance of Defensive Investments: Amid current market rally concerns, investors are advised to include defensive assets in their portfolios to mitigate potential downturn risks, ensuring stable returns during economic fluctuations.
- Performance of Dividend Kings: Companies known as 'Dividend Kings', such as PepsiCo (PEP), Black Hills (BKH), and Colgate-Palmolive (CL), have consistently increased dividends for over 50 years, demonstrating strong business resilience and stable cash flows, making them suitable holdings during economic uncertainty.
- PepsiCo's Market Advantage: With a dividend yield of 3.9%, higher than Coca-Cola's 2.6%, PepsiCo's diverse product portfolio, including snacks and beverages, is expected to drive revenue growth in the coming years, particularly as consumers continue to opt for affordable luxuries during economic slowdowns.
- Black Hills' Merger Prospects: Black Hills has increased its dividend for 56 consecutive years, currently yielding 3.7%, and plans to merge with NorthWestern Energy Group, which, if approved, will serve over 2 million customers, further strengthening its market position and revenue stability.
See More
Four High-Yield Dividend Stocks Recommended
- Coca-Cola's Stability: Coca-Cola (KO) raised its quarterly dividend from $0.51 to $0.53 this year, marking 64 consecutive years of increases, which underscores its status as a 'Dividend King'; the current yield stands at 2.6%, significantly above the S&P 500's 1.1%.
- PepsiCo's Growth: PepsiCo (PEP) announced a 4% increase in its quarterly dividend to $1.48 this month, having raised dividends for 54 consecutive years, with a current yield of 4%, nearly four times that of the S&P 500, reflecting its strong profitability and market competitiveness.
- Procter & Gamble's Long-Term Commitment: Procter & Gamble (PG) has paid dividends since 1890 and has raised them for 70 straight years, with the latest quarterly payout increased by 3% to $1.0885, yielding 3.1%, supported by over $11 billion in free cash flow that easily covers $7.6 billion in dividends.
- Realty Income's Appeal: Realty Income (O), a REIT, pays monthly dividends and recently raised its payout from $0.27 to $0.2705, yielding 5.2%, well above the FTSE Nareit All Equity REITs Index's 3.7%, demonstrating its strong cash flow and distribution capacity.
See More
Four Dividend Stocks to Aid Investors
- Coca-Cola Dividend Increase: Coca-Cola raised its quarterly dividend from $0.51 to $0.53 this year, marking 64 consecutive years of increases, which underscores its strong profitability and commitment to shareholders, with a current yield of 2.6%, significantly higher than the S&P 500's 1.1%.
- PepsiCo's Stable Returns: PepsiCo announced a 4% increase in its quarterly dividend to $1.48 this month, having raised dividends for 54 consecutive years, with a current yield of 4%, nearly four times that of the S&P 500, reflecting its robust market position and profitability.
- Procter & Gamble's Dividend History: Procter & Gamble has paid dividends since 1890 and has raised them for 70 straight years, with the latest quarterly payout increased by 3% to $1.0885 per share, yielding 3.1%, supported by strong free cash flow that ensures dividend sustainability.
- Attractiveness of Realty Income: Realty Income has increased its dividend 134 times since going public in 1994, recently raising the monthly payout from $0.27 to $0.2705 per share, yielding 5.2%, appealing to income-seeking investors due to its stable cash flow and high dividend policy.
See More
Three Quality Dividend Stocks to Invest In
- Real Estate Investment Trust: Realty Income, a retail-focused REIT, offers a current dividend yield of 5.2%, supported by stable rental income, and while its stock has dropped over 8% due to rising interest rates, long-term holding can yield compounding benefits.
- Food and Beverage Giant: PepsiCo, a 'Dividend King' with 50 consecutive years of dividend increases, currently has a 3.8% dividend yield; despite facing challenges from reduced consumer spending, its organic sales grew 2.6% year-over-year in 2026, with net revenue up 8.5%, showcasing strong market adaptability.
- Fast Food Leader: McDonald's, with over 45,000 locations, is on the verge of becoming a 'Dividend King' with a 2.6% dividend yield; despite a stock price decline due to industry weakness, analysts project annualized earnings growth of 7% to 8% over the next three to five years, making its current valuation of 23 times earnings attractive for investors.
- Investment Timing: All three companies are available for under $500, making them suitable for investors seeking stable dividend income; despite economic challenges, their strong brands and market positions present a wise choice for capital allocation.
See More
Non-Carbonated Drinks Surge as Young Consumers Shift Preferences
- Market Trend Shift: According to Circana data, carbonated beverage volumes dropped 1.1% in 2024, while ready-to-drink cocktails surged by 46.4%, indicating a growing consumer preference for non-carbonated drinks, particularly among younger generations.
- Impact of Young Consumers: Generation Z's preference for non-carbonated beverages is significant, with many believing carbonation leads to bloating, prompting beverage companies to innovate more in fizz-free products to meet this generation's health and functionality demands.
- Intensifying Brand Competition: Brands like Surfside have rapidly emerged as key players, with Surfside becoming the fastest-growing alcohol brand in the U.S. in 2024, showcasing strong demand for non-carbonated options in the alcoholic beverage market.
- Packaging and Marketing Innovation: As non-carbonated drinks gain popularity, aluminum cans have become a new trend, with brands like Liquid Death and Celsius successfully attracting young consumers by emphasizing fizz-free attributes and health-conscious branding, driving sales growth.
See More
Defensive Strategies Amid Inflation and Rate Uncertainty in Stock Market
- Dividend Kings Performance: PepsiCo has increased its dividends for 54 consecutive years, currently yielding 3.9%, and its diverse portfolio of beverages and snacks is expected to drive revenue growth, especially as the global snack market is projected to rise from $719 billion in 2024 to $922 billion by 2030.
- Utility Stability: Black Hills, a utility stock, has raised its dividends for 56 years with a current yield of 3.7%, and plans to merge with NorthWestern Energy Group, which would expand its customer base to over 2 million, further solidifying its market position.
- Strong Sales Performance: Colgate-Palmolive reported $5.3 billion in net sales for Q1 2026, marking its fourth consecutive quarter of record sales, and despite facing rising packaging and material costs, its 63-year history of dividend increases demonstrates its resilience to uncertainty.
- Market Defensive Strategies: Amid rising inflation and interest rate uncertainty, investors are leaning towards companies with stable dividends to protect their portfolios, making PepsiCo, Black Hills, and Colgate-Palmolive ideal choices due to their strong dividend records, providing a safety margin during market fluctuations.
See More
Defensive Investments Amid Market Rally Concerns
- Importance of Defensive Investments: Amid current market rally concerns, investors are advised to include defensive assets in their portfolios to mitigate potential downturn risks, ensuring stable returns during economic fluctuations.
- Performance of Dividend Kings: Companies known as 'Dividend Kings', such as PepsiCo (PEP), Black Hills (BKH), and Colgate-Palmolive (CL), have consistently increased dividends for over 50 years, demonstrating strong business resilience and stable cash flows, making them suitable holdings during economic uncertainty.
- PepsiCo's Market Advantage: With a dividend yield of 3.9%, higher than Coca-Cola's 2.6%, PepsiCo's diverse product portfolio, including snacks and beverages, is expected to drive revenue growth in the coming years, particularly as consumers continue to opt for affordable luxuries during economic slowdowns.
- Black Hills' Merger Prospects: Black Hills has increased its dividend for 56 consecutive years, currently yielding 3.7%, and plans to merge with NorthWestern Energy Group, which, if approved, will serve over 2 million customers, further strengthening its market position and revenue stability.
See More
Four High-Yield Dividend Stocks Recommended
- Coca-Cola's Stability: Coca-Cola (KO) raised its quarterly dividend from $0.51 to $0.53 this year, marking 64 consecutive years of increases, which underscores its status as a 'Dividend King'; the current yield stands at 2.6%, significantly above the S&P 500's 1.1%.
- PepsiCo's Growth: PepsiCo (PEP) announced a 4% increase in its quarterly dividend to $1.48 this month, having raised dividends for 54 consecutive years, with a current yield of 4%, nearly four times that of the S&P 500, reflecting its strong profitability and market competitiveness.
- Procter & Gamble's Long-Term Commitment: Procter & Gamble (PG) has paid dividends since 1890 and has raised them for 70 straight years, with the latest quarterly payout increased by 3% to $1.0885, yielding 3.1%, supported by over $11 billion in free cash flow that easily covers $7.6 billion in dividends.
- Realty Income's Appeal: Realty Income (O), a REIT, pays monthly dividends and recently raised its payout from $0.27 to $0.2705, yielding 5.2%, well above the FTSE Nareit All Equity REITs Index's 3.7%, demonstrating its strong cash flow and distribution capacity.
See More
Four Dividend Stocks to Aid Investors
- Coca-Cola Dividend Increase: Coca-Cola raised its quarterly dividend from $0.51 to $0.53 this year, marking 64 consecutive years of increases, which underscores its strong profitability and commitment to shareholders, with a current yield of 2.6%, significantly higher than the S&P 500's 1.1%.
- PepsiCo's Stable Returns: PepsiCo announced a 4% increase in its quarterly dividend to $1.48 this month, having raised dividends for 54 consecutive years, with a current yield of 4%, nearly four times that of the S&P 500, reflecting its robust market position and profitability.
- Procter & Gamble's Dividend History: Procter & Gamble has paid dividends since 1890 and has raised them for 70 straight years, with the latest quarterly payout increased by 3% to $1.0885 per share, yielding 3.1%, supported by strong free cash flow that ensures dividend sustainability.
- Attractiveness of Realty Income: Realty Income has increased its dividend 134 times since going public in 1994, recently raising the monthly payout from $0.27 to $0.2705 per share, yielding 5.2%, appealing to income-seeking investors due to its stable cash flow and high dividend policy.
See More
Three Quality Dividend Stocks to Invest In
- Real Estate Investment Trust: Realty Income, a retail-focused REIT, offers a current dividend yield of 5.2%, supported by stable rental income, and while its stock has dropped over 8% due to rising interest rates, long-term holding can yield compounding benefits.
- Food and Beverage Giant: PepsiCo, a 'Dividend King' with 50 consecutive years of dividend increases, currently has a 3.8% dividend yield; despite facing challenges from reduced consumer spending, its organic sales grew 2.6% year-over-year in 2026, with net revenue up 8.5%, showcasing strong market adaptability.
- Fast Food Leader: McDonald's, with over 45,000 locations, is on the verge of becoming a 'Dividend King' with a 2.6% dividend yield; despite a stock price decline due to industry weakness, analysts project annualized earnings growth of 7% to 8% over the next three to five years, making its current valuation of 23 times earnings attractive for investors.
- Investment Timing: All three companies are available for under $500, making them suitable for investors seeking stable dividend income; despite economic challenges, their strong brands and market positions present a wise choice for capital allocation.
See More
Non-Carbonated Drinks Surge as Young Consumers Shift Preferences
- Market Trend Shift: According to Circana data, carbonated beverage volumes dropped 1.1% in 2024, while ready-to-drink cocktails surged by 46.4%, indicating a growing consumer preference for non-carbonated drinks, particularly among younger generations.
- Impact of Young Consumers: Generation Z's preference for non-carbonated beverages is significant, with many believing carbonation leads to bloating, prompting beverage companies to innovate more in fizz-free products to meet this generation's health and functionality demands.
- Intensifying Brand Competition: Brands like Surfside have rapidly emerged as key players, with Surfside becoming the fastest-growing alcohol brand in the U.S. in 2024, showcasing strong demand for non-carbonated options in the alcoholic beverage market.
- Packaging and Marketing Innovation: As non-carbonated drinks gain popularity, aluminum cans have become a new trend, with brands like Liquid Death and Celsius successfully attracting young consumers by emphasizing fizz-free attributes and health-conscious branding, driving sales growth.
See More
