Coca-Cola vs. PepsiCo: Which Stock is the Better Buy?

In the ever-evolving landscape of the beverage and snack industry, two giants stand out: Coca-Cola and PepsiCo. Both companies have a rich history and a global presence, but their recent financial performances and strategic directions offer distinct investment opportunities. Let's dive into the data to determine which stock is the better buy right now.

Market Performance and Revenue Growth

Over the past decade, both Coca-Cola and PepsiCo have shown significant revenue growth, but their trajectories and specific growth rates differ. Coca-Cola's revenue for the quarter ending September 30, 2024, was USD 11.854 billion, down 0.83% compared to the same period last year. The company earned USD 46.366 billion over the twelve months ending September 30, 2024, a 2.97% increase from the previous year. This indicates a steady but modest growth rate for Coca-Cola.

In contrast, PepsiCo's revenue for the quarter ending March 31, 2024, was $18.250B, a 2.26% increase year-over-year. PepsiCo's revenue for the twelve months ending March 31, 2024, was $91.875B, a 4.36% increase year-over-year. PepsiCo's annual revenue for 2023 was $91.471B, a 5.88% increase from 2022. PepsiCo's annual revenue for 2022 was $86.392B, an 8.7% increase from 2021. PepsiCo's annual revenue for 2021 was $79.474B, a 12.93% increase from 2020. This shows that PepsiCo has experienced more volatile but generally higher growth rates compared to Coca-Cola.



Product Portfolios and Market Influence

The product portfolios of Coca-Cola and PepsiCo exhibit distinct differences, which significantly influence their market performance and consumer preferences.

Coca-Cola's product portfolio is heavily focused on beverages, with iconic brands like Coca-Cola Classic, Diet Coke, Sprite, and Fanta. The company has also diversified into healthier options and sustainable packaging to meet changing customer preferences. For instance, Coca-Cola Zero Sugar sales rose by 11% in Q3 2024, indicating strong consumer interest in low-sugar options. Coca-Cola's brand value is over 98 billion U.S. dollars, making it the top soft drink brand worldwide. The company's advertising campaigns are innovative and memorable, contributing to its high brand recognition. Coca-Cola's revenue for the quarter ending September 30, 2024, was USD 11.854 billion, down 0.83% compared to the same period last year, but its total assets had grown to USD 106.266 billion by September 30, 2024, an 8.9% increase from the same period last year.

In contrast, PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, with a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages. It distributes its products through direct-store-delivery and customer warehouse systems, as well as third-party networks. It also sells ready-to-drink tea and coffee products through joint ventures with Unilever and Starbucks along with brands like Crush and Dr Pepper. PepsiCo's annual revenue for 2023 was $91.471B, a 5.88% increase from 2022. PepsiCo's revenue for the quarter ending March 31, 2024, was $18.250B, a 2.26% increase year-over-year. PepsiCo's net income came in at $1.52 billion, or $1.11 per share, up slightly from $1.3 billion a year ago but well below the $2.61 billion, or $1.90 per share, consensus estimate from Visible Alpha.



Strategic Initiatives and Future Outlook

Coca-Cola has been focusing on diversifying its offerings by introducing healthier options and sustainable packaging to meet changing customer preferences. The company's advertising spending increased to USD 5.01 billion in 2023, up from USD 4.319 billion in 2022. Coca-Cola's brand was valued at USD 106.45 billion in 2024, marking significant growth globally. The company maintained a leading 44.9% market share in the U.S. carbonated soft drink market in 2024.

PepsiCo, on the other hand, has been expanding its product portfolio to include more snack foods and healthier beverage options. The company's snack food and beverage giant reported a declining $27.78 billion in revenue, down from $27.85 billion in the same time a year ago and the $27.91 billion growth that analysts had expected. PepsiCo's (PEP) net income came in at $1.52 billion, or $1.11 per share, up slightly from $1.3 billion a year ago but well below the $2.61 billion, or $1.90 per share, consensus estimate from Visible Alpha.

Conclusion

Both Coca-Cola and PepsiCo have their strengths and weaknesses. Coca-Cola's strong brand equity and focus on beverages have allowed it to maintain a leading market share in the non-alcoholic beverage industry. PepsiCo's diversified portfolio, including both food and beverage products, has enabled it to capture a broader range of consumer preferences and market segments. For investors looking for stability and consistent growth, Coca-Cola may be the better choice. However, for those seeking higher growth potential and a more diversified product portfolio, PepsiCo could be the way to go. Ultimately, the decision will depend on individual investment goals and risk tolerance.