Is PepsiCo Stock Halal?
PepsiCo, Inc. · PEP · NASDAQ
PepsiCo, Inc. (PEP) passes our AAOIFI-based screen. Its core business is permissible, and (data as of 2026-03-21) interest-bearing debt is 26.6% of market cap and cash plus interest-bearing securities 5.5% — both inside the 30% AAOIFI thresholds. It is independently held by Shariah-screened ETF SPUS, confirming it passes professional screens. Ratios move with the share price, so check the data-as-of date; any incidental interest income should be purified.
Financial data as of 2026-03-21 · Screening basis: AAOIFI · Last reviewed 2026-06-14
Our Analysis
PepsiCo is a food-and-beverage company whose core activities, snacks and nonalcoholic drinks, are permissible. Its fiscal 2025 revenue of $93.9 billion is split across six segments, with North American convenient foods (Frito-Lay and Quaker) and North American beverages forming the largest pieces, and an international business representing more than 40% of revenue. The business-activity screen is clean apart from one small exception.
That exception is alcohol: PepsiCo markets Hard MTN Dew, an alcoholic version of Mountain Dew made and distributed through a partnership with The Boston Beer Company. The company does not disclose its revenue, but it is a niche product within a roughly $94 billion business, the kind of immaterial impermissible exposure that AAOIFI-style screens typically allow provided the corresponding share of dividends is purified.
The professional signal is positive on the strict end: PepsiCo is held by SPUS as of June 11, 2026, meaning it passes the S&P 500 Shariah Industry Exclusions methodology and the fund's debt-to-market-cap screen below 30%. It is not in HLAL, but HLAL tracks a different index (FTSE USA Shariah) with its own constituent selection, and absence there is not evidence of a failed screen. For a Muslim investor, PepsiCo currently looks like a screen-passing consumer-staples name, with the usual caveat to verify the latest status and apply dividend purification for the small alcohol exposure.
Business Activity Screen
PepsiCo is a global convenient-foods and beverages company. Per its fiscal 2025 10-K (year ended December 27, 2025; filed February 2026), full-year net revenue was $93,925 million. The company reorganized into six reportable segments: PepsiCo Foods North America (Frito-Lay and Quaker combined), PepsiCo Beverages North America, International Beverages Franchise, Europe Middle East and Africa, Latin America Foods, and Asia Pacific Foods.
PepsiCo's snacks (Frito-Lay, Quaker) and nonalcoholic beverages (Pepsi, Gatorade, Mountain Dew, Tropicana) are permissible activities. The Shariah-relevant item is its limited alcoholic beverage presence, principally Hard MTN Dew, an alcoholic version of Mountain Dew produced and distributed under a partnership with The Boston Beer Company; PepsiCo does not separately disclose Hard MTN Dew revenue, so its share is not quantifiable from filings and is understood to be immaterial to a ~$94 billion revenue base. PepsiCo also earns interest income on cash and investments, reported outside operating revenue and not separately verified here. PepsiCo is currently held by SPUS, indicating it passes that fund's AAOIFI-based industry and debt-to-market-cap screens as of 2026-06-11.
Financial Ratio Screen
| Screen | Value | AAOIFI limit | Result |
|---|---|---|---|
| Interest-bearing debt / market cap | 26.6% | < 30% | Pass |
| Cash + interest-bearing securities / market cap | 5.5% | < 30% | Pass |
| Impermissible income / total revenueGross interest income ≈ $0.7B (net interest expense & other was -$1,121M against $1,840M gross interest expense) on ~$92B net revenue (FY2025) ≈ 0.8% — under 5%. | 0.8% | < 5% | Pass |
Spot market cap at research date (consider trailing average for borderline names). Data as of 2026-03-21 · thresholds per AAOIFI Shariah standards.
This verdict uses the AAOIFI standard — the most widely used and, at a 30% debt limit, the most conservative mainstream Shariah standard. Interest-bearing debt and interest-bearing securities each stay under 30% of market cap, and impermissible income under 5% of revenue. Other standards (Dow Jones Islamic, S&P Shariah, MSCI Islamic, FTSE Yasaar) use ~33% limits or screen against total assets, so a borderline company can be rated differently by each. How we screen & why screeners disagree →
How PepsiCo screens across Shariah standards
The standards disagree on this company. It passes some Shariah screens and fails others — which is exactly why you may see a different answer in different apps. Our headline verdict uses AAOIFI, the strictest and most widely cited mainstream standard.
| Standard | Debt | Cash & interest securities | Limit / basis | Result |
|---|---|---|---|---|
| AAOIFI (our standard) | 26.6% | 5.5% | < 30% of market cap | Pass |
| Dow Jones Islamic / S&P Shariah thresholdDow Jones and S&P apply this limit against a trailing 24–36-month average market cap; shown here on the same point-in-time market cap for comparison. | 26.6% | 5.5% | < 33% of market cap | Pass |
| MSCI Islamic / FTSE Yasaar basisTotal-assets denominator. MSCI/FTSE also apply entry/exit buffers and a receivables screen we do not reproduce. | 47.7% | 9.8% | < 33.33% of total assets | Fail |
HalalWallet computation reproducing each standard's threshold and denominator from public filings (balance sheet as of 2026-03-21) — not the providers' licensed index determinations, which can differ. Debt is interest-bearing borrowings (operating leases excluded). The impermissible-income screen (< 5% of revenue) is common to all of these standards and is shown in the ratio table above. Dow Jones and S&P apply their limit against a trailing 24–36-month average market cap; MSCI and FTSE add entry/exit buffers and a receivables screen. Full methodology →
Other stocks where Shariah screeners disagree
These companies pass under some mainstream standards and fail under others — the same pattern as this verdict. That is why two apps can show different answers.
AbbVieABBV
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Scholars' & Screeners' Positions
Published positions, cited as stated. Screeners can reach different conclusions on the same company because of ratio timing and methodology differences — we report the disagreement rather than flatten it.
Purification
Even Shariah-compliant companies typically earn a small amount of incidental interest on corporate cash. The standard practice is to purify: donate the proportion of your dividends (and, per some scholars, capital gains) attributable to impermissible income. Our purification calculator automates the math from your holding and the company's disclosed figures.
Purification calculatorKeep your portfolio halal
A pass today isn't a pass forever — ratios drift across thresholds between filings. A halal screener monitors holdings continuously.
Related guides
Consider Consulting an Islamic Scholar
Major whether PepsiCo, Inc. is halal decisions often involve nuances that vary by scholarly opinion and personal circumstance. While HalalWallet provides educational comparisons and tools, we are not scholars or financial advisors. For personal guidance on Shariah compliance, consider speaking with a qualified Islamic scholar, your local imam, or a Shariah-certified financial advisor familiar with your situation.
Important: HalalWallet is an educational comparison platform. We do not provide financial, legal, or religious advice.
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- Review the contract structure (Murabaha, Ijara, Musharakah, etc.) and any disclosed Shariah board opinions.
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Sources and review process
This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-06-01
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