PepsiCo and Hershey Stocks Decline by 12% in 2026 Amidst Dividend Stability
As of October 1, 2026, PepsiCo, a major player in the snack and beverage market, and Hershey, well-known for its confectionery products, have both experienced a year-to-date decline of approximately 12.5% in their stock prices. Despite this downturn, both companies remain appealing to income investors due to their reliable dividend payouts.
PepsiCo, which owns popular brands such as Lay's, Doritos, Gatorade, and Pepsi, increased its quarterly dividend by 4% in 2026, continuing a 54-year streak of annual increases. This has pushed its forward dividend yield to a notable 4.63%. The company has faced challenges from weak consumer spending in recent years, yet it reported a rise in food sales volumes by 3% year over year during the first half of the year. Beverage volumes also saw a 2% increase year over year. The company achieved a record free cash flow of $9.2 billion for the trailing twelve months by the second quarter of 2026, distributing 84% of that to shareholders through dividends, further cementing its dividend credibility.
Hershey, recognized for its products like Reese's and Kisses, has maintained its dividend payments for 96 consecutive years, despite financial impacts from increased cocoa prices. The company declared a quarterly dividend of $1.452 per share on July 29, 2026, resulting in a forward dividend yield of 3.65%. Hershey is recovering from the cocoa price shock as it invests in automation and expands manufacturing capacity. For 2026, Hershey projects an organic sales growth of 3% to 3.5%, with adjusted earnings potentially rising by 32.5% to 35%. The company recorded free cash flow of $2.1 billion over twelve months by Q2 2026, distributing 52% as dividends.
Meanwhile, Hershey's efforts in supporting fast-growing brands and improving financial resilience have positioned it well for future growth. The company continues to focus on long-term brand development, making it a stable entity in the consumer market with potential for enduring success.
