Coca-Cola vs PepsiCo Which Is a Better Investment?

Coca-Cola and PepsiCo are two of the most well-known and successful companies in the beverage industry. Both companies have a long history of providing consumers with a wide range of popular products, including their signature soft drinks. When it comes to their stocks, Coca-Cola and PepsiCo have been known to be resilient and stable investments for many years. Investors often compare these two giants in terms of their financial performance, market share, and growth prospects. In this analysis, we will delve into the key differences and similarities between Coca-Cola and PepsiCo stocks.

Coca-Cola or PepsiCo?

When comparing Coca-Cola and PepsiCo, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Coca-Cola and PepsiCo.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Coca-Cola has a dividend yield of 3.79%, while PepsiCo has a dividend yield of 4.01%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Coca-Cola reports a 5-year dividend growth of 3.36% year and a payout ratio of 78.28%. On the other hand, PepsiCo reports a 5-year dividend growth of 6.63% year and a payout ratio of 75.99%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Coca-Cola P/E ratio at 26.24 and PepsiCo's P/E ratio at 24.10. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Coca-Cola P/B ratio is 10.30 while PepsiCo's P/B ratio is 11.59.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Coca-Cola has seen a 5-year revenue growth of 0.31%, while PepsiCo's is 0.45%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Coca-Cola's ROE at 39.75% and PepsiCo's ROE at 48.96%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $63.25 for Coca-Cola and $163.98 for PepsiCo. Over the past year, Coca-Cola's prices ranged from $56.60 to $73.53, with a yearly change of 29.91%. PepsiCo's prices fluctuated between $158.03 and $183.41, with a yearly change of 16.06%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.