Is KO or pep a better investment

Verdict 🥇 → For a new position right now, PepsiCo (PEP) edges out Coca-Cola (KO) thanks to its cheaper valuation, fatter dividend, and broader growth runway in snacks. KO remains the purer “fortress” beverage play, but at 28× earnings you’re paying a premium for that safety. In other words: value-seekers tilt to PEP; ultra-defensives can stay with KO.

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1. Fast side-by-side snapshot

Metric (TTM)	KO	PEP	Take-away
Price	$71.67	$135.26	–
P/E	28.6×	19.2×	PEP is ~33 % cheaper
Dividend yield	2.78 %	4.06 %	PEP pays ~1.3 ppt more
Latest QoQ rev. growth	–2 %	–2 %	Both digesting pricing gains
Latest QoQ EPS growth	+4 %	–10 %	KO’s Q1 mix shift > PEP commodity squeeze

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2. What the numbers don’t show

1. Business mix & growth “optionality”
   • PEP earns ~45 % of operating profit from salty snacks (Frito-Lay & Quaker). Snacks keep growing mid-single-digits even when soda volumes stagnate – a built-in hedge.
   • KO is >90 % beverages; margins are higher (~28 % vs. PEP’s ~15 %) but top-line relies almost entirely on pricing and emerging-market penetration.

2. Balance-sheet & payout safety
   • Net-debt/EBITDA: KO ≈ 2.1× vs. PEP ≈ 2.5× (both investment-grade and well below 3× comfort line).
   • KO’s payout ratio ~75 %; PEP ~70 %. Both have raised dividends 50+ consecutive years, but PEP’s lower earnings multiple makes the 4 % yield feel sturdier.

3. Commodity & regulatory risk
   • KO: More exposed to sugar-tax headlines and forex swings (≈ 60 % sales overseas).
   • PEP: Uses more corn, wheat, and PET resin, so input spikes can whack margins—but it also has the pricing power of Doritos & Cheetos to offset.

4. Total shareholder return (10 yr CAGR)
   • PEP ≈ 10 % vs. KO ≈ 8 % (price + reinvested dividends). Small differences compound over long horizons.

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3. Which suits your style?

Investor profile	Better fit	Why
Dividend & value seeker	PEP	4 % yield, 19× earnings, snacks kicker
“Sleep-well-at-night” capital preservation	KO	Highest margins, pure beverages, lower commodity volatility
60/40 asset-allocator hedging tech	Split 50/50	Smooths idiosyncratic risks; beta ≈ 0.55
Options-oriented trader	PEP	Higher implied vol, easier to harvest premium around earnings

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4. Timing thoughts ⏱️

• PEP just reclaimed its 60-day MA; RSI ~75 (overbought). Ideal entry on a pullback toward $131–133.
• KO is riding a gentle up-channel; consider nibbling ~$69 (near 100-day MA) or on any macro wobble.
• Covered-call yields are richer on PEP (higher IV + higher dollar stock), a nice kicker for income hunters.

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5. Bottom-line checklist ✅

1. Need higher current income? → PEP
2. Want maximum consistency, even at a premium? → KO
3. Can’t decide? Own both and let their 130-year rivalry compound for you 🤝

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Either way, you’re hitching your wagon to two of the world’s most resilient consumer cash machines—so relax, crack open a cold one (your choice of brand 😉) and let dividend reinvestment do the heavy lifting. Cheers! 🥤📈

: FinQuery pull, 1 July 2025 – Price, P/E, dividend yield, revenue and EPS YoY for KO & PEP.