1 Dividend King Stock I'd Buy Before Illinois Tool Works in 2026

• Illinois Tool Works is simply a highly diversified, high-margin concern conglomerate with a rock-solid dividend.

• PepsiCo yields considerably much than Illinois Tool Works and commands a little costly valuation.

• Pepsi has plentifulness of ways to instrumentality to maturation without overhauling its proven concern model.

• 10 stocks we similar amended than PepsiCo ›

Dividend Kings are an elite radical of dividend-paying companies that person boosted their payouts for astatine slightest 50 consecutive years. There are less than 60 Dividend Kings, and concern conglomerate Illinois Tool Works (NYSE: ITW) is 1 of them.

Illinois Tool Works is an fantabulous institution with precocious operating margins and dozens of brands crossed aggregate industries. However, the company's maturation has slowed owed to cyclical downturns successful cardinal markets, request and tariff pressures, and currency headwinds.

Despite these challenges, ITW is simply a beardown bargain for 2026. The institution has accrued its dividend for 62 consecutive years and consistently repurchases stock. ITW besides commands a tenable valuation for specified a reliable dividend payer, trading astatine 22.5 times guardant net with a 2.6% dividend yield.

Here's wherefore PepsiCo (NASDAQ: PEP) could beryllium an adjacent amended Dividend King to bargain successful the caller twelvemonth -- particularly for investors looking to maximize their passive income.

Like galore user staples stocks, Pepsi had a down twelvemonth successful 2025, with the banal falling 5.6%. Consumer staples were 1 of 2 sectors that mislaid worth successful 2025 contempt an fantabulous twelvemonth for the broader market.

In summation to beverage brands similar flagship Pepsi, Gatorade, and Mountain Dew, PepsiCo owns Frito-Lay and Quaker Oats, arsenic good arsenic a assortment of different brands crossed snack and mini meals categories. But Pepsi is facing a request slowdown owed to shifting user preferences toward wellness and wellness, arsenic good arsenic the higher outgo of living, accumulation outgo pressures, and tariffs.

Pepsi is forecasting a debased single-digit summation successful full-year 2025 integrated gross and level halfway changeless currency net per share. Pepsi's results are poor, but that's already reflected successful the banal price.

Pepsi banal sports a specified 16.2 guardant price-to-earnings ratio compared to a 10-year median P/E of 26.3. Its dividend output is implicit 4%, which is importantly higher than its humanities average.

Some investors person mislaid religion successful Pepsi oregon are simply unwilling to wage arsenic precocious a aggregate for its net due to the fact that the company's maturation has stalled. But the sell-off has gone excessively far, particularly considering Pepsi's issues are solvable.