Why Coca-Cola's Rally Makes PepsiCo Stock Look Even More Attractive

Reuben Gregg Brewer, The Motley Fool

Sun, Mar 9, 2025, 3:00 PM 5 min read

It is virtually intolerable not to look astatine Coca-Cola (NYSE: KO) if you are considering buying PepsiCo (NASDAQ: PEP) and vice versa. The 2 companies are iconic and globally ascendant beverage giants. The terms charts of the 2 stocks, however, look precise antithetic today. If you are a semipermanent dividend investor, PepsiCo looks similar it is the astir charismatic aft Coca-Cola's caller rally. Here's why.

Coca-Cola makes a wide scope of beverages. Basically, that's each it does. The institution does this precise well, with a monolithic planetary organisation network, probe and improvement acumen, and selling skills that spot it successful the pantheon of the user staples sector. It besides has the standard to enactment arsenic an manufacture consolidator, buying up companies with charismatic products and increasing them by simply plugging the caller products into Coca-Cola's organisation system. It is simply a one-trick pony, but it is simply a precise bully trick.

PepsiCo makes a wide scope of beverages. It besides makes a wide scope of snacks and packaged nutrient products. It has a monolithic planetary organisation network, a beardown probe and improvement department, and a selling squad each spot arsenic bully arsenic Coca-Cola's. As for scale, PepsiCo has a agelong past of buying smaller brands and expanding them, conscionable similar Coca-Cola. PepsiCo's astir caller endeavor connected this beforehand is Mexican American nutrient shaper Siete, which offers some snacks and packaged nutrient items.

PepsiCo whitethorn not beryllium arsenic ascendant a beverage institution arsenic Coca-Cola; Pepsi-Cola has dropped to 3rd successful the cola wars. However, it is the No. 1 snack marque and a precise coagulated No. 2 successful the broader beverage space. In packaged food, it holds its ain against larger peers. In different words, it is simply a well-run and diversified nutrient company. Investors who similar diversified businesses volition astir apt similar PepsiCo based connected this information alone.

That said, some Coca-Cola and PepsiCo are Dividend Kings, which speaks to the spot of their underlying businesses. Coca-Cola's dividend streak is simply a small longer, but a institution simply can't summation its dividend for 50+ years without having a bully concern program that gets executed good twelvemonth successful and twelvemonth out. These 2 user staples companies basal toe-to-toe arsenic businesses, with the objection of diversification.

That said, each institution that exists for agelong capable volition spell done some bully periods and atrocious periods. Right now, PepsiCo is facing immoderate concern weakness portion Coca-Cola is executing better. Investors are alert of the dichotomy and bargain and merchantability accordingly. If you look astatine the illustration below, it astir seems similar the 2 companies switched places. But short-term concern gyrations aren't what semipermanent investors should beryllium disquieted about. The bigger question is whether oregon not the company, beryllium it Coca-Cola oregon PepsiCo, is inactive good run.