Bgiant snack food and snack food PepsiCo (NASDAQ: PEP) doesn’t need a lot of introduction. The $ 200 billion company owns some of the best-known brands in the world, including its namesake soft drinks Pepsi, Lay’s crisps, Quaker Oats and Lipton tea. Income investors especially like the fact that its diverse product base favors the constant payment of a dividend which, at the current stock price, pays 2.9% – more than double the 1.38% of the S&P 500 gives way this month.

However, if your big goal as an investor is to find safe, high yielding dividend stocks, here are three you can buy right now that offer better payouts than PepsiCo with even less risk.

Image source: Getty Images.

1. Coca-Cola just tastes better, to the fans

Dividend yield: 3.1%

Anyone who knows PepsiCo certainly knows Coca Cola (NYSE: KO). The two companies have been fighting each other for decades now, but rather than tear each other apart, their competitive efforts have kept their rivals from seriously entering the soft drink market.

If you’re specifically looking for a dividend-payer with a presence on your grocery store shelves, however, Coca-Cola is the better bet.

Coca-Cola has spent the last few years withdrawing from the bottling business, shifting to a model in which it largely licenses its brands to third-party bottling companies. If the exit from the bottling and distribution part of its activity reduced its income, the profit margins on licenses are much higher than the margins on bottling. This strategy was only just beginning to pay off financially when the COVID-19 pandemic rocked the world.

In some parts of the world things are returning to normal now, and while the company continues to transform its contract bottlers into franchise partners, profit growth is picking up where it left off in early 2020.

Analysts’ consensus forecast for earnings per share of $ 2.18 in 2021 is not only better than expected results from last year – it is also better than EPS of $ 2.11 in 2019, although sales are expected to be about 1% lower than they did. year. And earnings at that level will be more than enough to cover the current annualized dividend of $ 1.68 per share.

2. Sheer size makes Southern Company a better buy

Dividend yield: 4.1%

As reliable as consumers can buy their favorite drinks, they are even more determined to keep their lights on. That’s what makes utilities such a great dividend-paying stock – people prioritize paying those particular bills. And one of the best utility stocks to buy right now is Southern Company (NYSE: SO), posting a dividend yield of 4.1%.

You may be a customer of Southern Company without even realizing it. It is the parent of several more localized utility providers such as Georgia Power, Virginia Natural Gas, and Southern Nuclear. It is also an electricity wholesaler. In total, it serves 9 million customers in a handful of states, most of which are (unsurprisingly) in the southern United States. It is the third largest utility company in the country by market capitalization.

Its size may seem unimportant, but don’t overlook this detail. Although electricity distribution activities have always been capital intensive, the rise of environmentally friendly renewable energy sources is forcing utilities to make heavy up-front costs.

To that end, Southern is budgeting more than $ 35 billion in capital spending over the next five years. That high figure will cover large investments in renewable energy facilities – including its recent acquisition of Deuel Harvest Wind Farm in South Dakota and Glass Sands Wind Power Plant in Oklahoma – in an area where scale is necessary to achieve fiscal sustainability.

It’s also worth noting that the company just increased its dividend for the 20th year in a row. With only five more years between him and dividend aristocrat status, it’s likely that Southern Company management will do whatever it takes to avoid restarting that clock now.

3. From pipeline to portfolio, Pfizer is designed to succeed

Dividend yield: 3.9%

Finally, add a pharmaceutical outfit Pfizer (NYSE: PFE) to your list of more dividend paying stocks than PepsiCo currently does.

Pfizer is the name behind blockbusters like the pneumonia vaccine Prevnar, the cancer drug Ibrance and Eliquis, which is used to prevent blood clots. The company gained further international recognition for the COVID-19 vaccine with which it co-developed BioNTech, whose sales helped increase last quarter revenue by an astounding 42% year-over-year. This surge in sales is expected to persist for most of this year, although it clearly won’t last forever.

The thing is, it doesn’t matter. Even after revenues start to return to more normalized levels in 2022, this company will remain one of the best and most profitable names in the pharmaceutical industry. In 2019, Pfizer turned $ 51.8 billion in revenue into net operating income of $ 16.7 billion – and it was a pretty typical year.

Its profit-making power is testament to not only the company’s current portfolio, but a pipeline that seems perpetually filled with budding blockbusters. According to the company’s most recent calculations, candidates tested in its 38 potential breakthrough trials could generate more than $ 15 billion in sales through 2025 and collectively generate annual revenue of between $ 35 billion and $ 40 billion. to their maximum sales.

Perhaps the strongest dividend-based argument for owning Pfizer, however, is the company’s level of commitment to this payment. Pfizer has made a quarterly payment for the past 82 years and has increased its dividend annually for the past 11 years. In addition, during this 11-year period, the company increased the payout at an average annual rate of 7.3%.

10 stocks we like better than Coca-Cola
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James Brumley does not have a position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.