It is practically impossible not to look Coca-Cola(Nyse: ko) If you plan to buy Pepsico(Nasdaq: PEP) and vice versa. The two companies are emblematic and global drinks giants. However, the price graphics of the two actions seem very different today. If you are a long-term dividend investor, Pepsico seems to be the most attractive after the recent gathering of Coca-Cola. Here is why.
Coca-Cola makes a wide range of drinks. Basically, that’s all he does. The company does this very well, with a massive global distribution network, a sense of research and development and marketing skills that place it in the pantheon of The consumer staples sector. It also has the scale to act as an industry’s consolidator, buying businesses with attractive products and cultivating them by simply plugging new products into the Coca-Cola distribution system. It’s a pony in a turn, but it’s a very good tip.
Image source: Getty Images.
Pepsico makes a wide range of drinks. It also manufactures a wide range of packaged snacks and food products. It has a huge global distribution network, a solid research and development department and a marketing team as good as Coca-Cola. As for the scale, Pepsico has a long history of purchasing small brands and extending them, as is Coca-Cola. The most recent pepsico effort on this front is the manufacturer of American Mexican food Siete, which offers snacks and packaged foods.
Pepsico may not be a drinking company as dominant as Coca-Cola; Pepsi-Cola fell third in the Cola Wars. However, it is the brand of snack n ° 1 and a very solid n ° 2 in the wider drinking space. In packaged foods, it is held against the greatest peers. In other words, it is a well -managed and diversified food company. Investors who like diversified companies will probably prefer Pepsico depending on this fact.
That said, Coca-Cola and Pepsico are kings of dividends, which testify to the strength of their underlying companies. The Coca-Cola dividends sequence is a little longer, but a company simply cannot increase its dividend for more than 50 years without having a good business plan which is well executed year after year. These two basic consumer companies are companies as a business, with the exception of diversification.
That said, each company that exists for quite a long time will spend both good periods and bad periods. Currently, Pepsico is faced with a certain commercial weakness while Coca-Cola is better. Investors are aware of dichotomy and buy and sell accordingly. If you look at the table below, it almost seems that the two companies have changed their place. But short -term commercial gyps are not what long -term investors should be concerned about. The biggest question is whether the company, whether Coca-Cola or Pepsico, is always well managed.
The answer is that these two basic consumer giants are well managed, but Coca-Cola is doing a little better at the moment. The problem with Pepsico is really relative because it was able to pass through large price increases when inflation took place after the coronavirus pandemic. This increase is now completed and it has “only” increased organic sales by 2% and the basic profits by 9% in 2024. It required similar performance in 2025, with low-figure growth and growth in half-chiffon profits. It is actually not bad in the consumption clip sector, which is known to be a slow and regular interpreter.
Based on this news, however, investors have punished the stock, which is down approximately 20% compared to its peak in 2023. The decline pushed the pepsico yield to the highest levels in the history of the company. And its price / sales and price / profits ratios are lower than their five years. It is a well -managed company that seems to have been placed on the sales rack.
In comparison, the Coca-Cola stock has rallied in recent months. Its dividend yield is far from the historical summits of the stock. And the price-sales and price / profit ratios are now both above their five years. Before the rally, Coca-Cola was at a more convincing price, but now it looks a little expensive. This makes Pepsico all the more attractive, given their direct competition in the drinks sector.
None of this suggests that Coca-Cola is a bad business. In fact, it’s a very good business. It is simply not as convincing as Pepsico, an equally good business, right now. The reason has more to do with the myopic vision of Wall Street, which focuses too much in the short term. If you have been thinking for decades, especially if you are an income investor, Pepsico and its historically high yield of 3.5% are even more attractive after the Coca-Cola price rally.
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