Dividends4Life: The Pepsi Millionaires

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The Pepsi Millionaires

Posted by D4L | Thursday, August 09, 2012 | | 0 comments »

Back in 2003, PepsiCo Inc. (PEP) made headlines announcing its Pepsi Billion Dollar Sweepstakes. Undoubtedly the goal of the competition was to drive sales and to create marketing buzz. The competition ran from May 1 to September 14 of 2003, culminating in a special television show involving 1,000 contestants, several dice, and a chimpanzee. One individual took home a guaranteed prize of $1 million. This is one way to make a million through PEP. However, most likely, others have also made a million with PEP. These individuals would be loyal PEP investors who invested every quarter as well as reinvested their dividends.

An investor initially purchases 50 shares of PEP in early 1977. These shares cost about $3,600, which was a large amount of money for the average person in 1977. All dividends would be invested into the stock as well as some additional money. Starting in 1978, the investor would also invest another $200 each quarter. Every year, that amount would be raised by 2%. By 2011, the quarterly investments would be around $400 excluding the reinvested dividends. The total direct capital invested, excluding taxes, over the 35 year of this project would be less than $45,000. Today, the investor would have over 16,000 shares worth approximately $1.2 million.

Source: Seeking Alpha

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