PepsiCo Increases Dividends

Another dividend increase for me as PepsiCo (NYSE: PEP), the well-known maker of snacks and drinks, announced a 7% increase in its quarterly dividend (from $0.45 to $0.48).

I had mentioned the high probabilities of a dividend increase in January, when I upped my position in the company within my RRSP. This increase will translate into $12 more in dividend for me. On top of that, the price of the shares moved up quite a bit following the announcement, a difference of about $2 per shares compared to the week before the announcement. That was only an increase of about 3%, so I think we can reasonably expect the price to keep moving up -- markets tend to evaluate stable companies based on their dividend yield. But even that increase in the share price means that my position is now worth $200 more than before the announcement.

That's the joy of dividend growth -- you get more money paid up to you everytime there is an increase, but you also get the capital gain to go with it.