When a dividend stock falls in price, it can represent an excellent time to buy it. At a lower price, the yield is higher and there’s the opportunity for investors to benefit from potential stock appreciation in the future. After all, dividend stocks are often among the safest investments you can buy since their businesses need to be performing well and generating cash to make recurring dividends.
And PepsiCo (NASDAQ:PEP) certainly falls into that category. The beverage company is on the cusp of becoming a Dividend King – its streak of dividend increases is at 49 years in a row and it’s just one more away this year from joining that exclusive club.
The stock nosedived recently, however, after announcing that it would be suspending its operations in Russia. The move, which follows in the footsteps of many businesses that are not operating in Russia amid its invasion of Ukraine, will negatively impact PepsiCo’s business.
Shares of the stock fell following the news, with PepsiCo’s stock falling below a Relative Strength Index of 30 for the first time since February 2021 when it did so briefly. Down just under 9% in a month, the stock has now underperformed the S&P 500, which has fallen by 5% during that time frame. Shares of PepsiCo last traded around these levels in October 2021. Although it’s not a 52-week low, now could still be a great time to buy shares of this solid dividend stock with its yield now at 2.8%.
There’s no telling how long the suspension of operations in Russia will last, but with PepsiCo being a global business, it can likely absorb the impact and continue paying (and increasing) its dividend.