The company's performance has been hit by significantly lower COVID-related sales in both divisions as the pandemic eased out. Coca-Cola was founded by John Pemberton in 1886 in Atlanta, Georgia, with a formula for a coca wine called French Wine Coca. Notably, both companies have ventured into the energy drink beverage category. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. This compensation may impact how and where listings appear. Learn more about planning and maintaining a happy, financially secure retirement. According to MSNBC , Diet Coke sold 927 million cases in 2010, compared to Pepsi's 892 million. Today, you can download 7 Best Stocks for the Next 30 Days. These are not the returns of actual portfolios of stocks. Lorem ipsum dolor sit amet, consectetur adipiscing elit. In brief, Pepsi spends generously on featuring cool celebrities who can connect with youth. Discover dividend stocks matching your investment objectives with our advanced screening tools. Coca-Cola's 2021 net revenue grew to $38.7 billion, while PepsiCo's 2021 net revenue grew to $79.47 billion. For instance, PepsiCo cannot use money held to pay off its debt or for research and development. Learn More. Both KO and PEP are dividend aristocrats, which are companies that have raised their dividend for at least 25 consecutive years. Pepsi-Cola was invented in 1893 in New Bern, North Carolina by pharmacist Caleb Bradham. The reason is because EVA is a measure of added value, and since Coca Colas EVA is obviously greater than that of PepsiCo, it would be a good investment to choose Coca Cola as it has a higher potential. Innovations and accelerating digital investments bode well.However, pressures from higher transportation and input costs remain. KO and PEP are both strong cash flow generators, and have been for years. Advertisers know that we have a greater chance of buying a product if we can picture ourselves how we would like to be portrayed of course with the help of their product. Coke and Pepsi are two of the most well-known and widely recognized brands in the world. Success! It is negatively impacting our society. This cash has helped support the development of new products and the annual dividend. Both Coke and Pepsi have also pursued different strategies when it comes to partnerships and acquisitions. Great! PepsiCos debt doesnt cripple the company, but it does hamper growth in some ways; PepsiCo has to pay interest on their debt regardless of whether they are generating positive cash flow. Coca-Cola Company. The first was the low price environment that has continued throughout North America over the last year. In terms of product offerings, both Pepsi and Coca-Cola offer a wide range of beverages, including carbonated sodas, sports drinks, and water. Marketing Strategies Comparison Coca Cola Vs. Pepsi: Comparing Sales, Earnings & More. With roots dating back to 1898, PepsiCo has built a highly-diversified product portfolio. For example, though Doritos and Tostitos are comparable products, Doritos is a more globally-recognizable brand that may be priced differently based on its popularity. Pepsi claims franchsises in 24 states in 1910. Looking into other years and comparisons, I see that Coca Cola gathers almost 53% of their annual revenue during spring and summer, whereas Pepsi seems to produce 30% more revenue in the later months of the year. Today you can access their live picks without cost or obligation. Asia Pacific, Australia, New Zealand, and China (all products in Asia, Australia, New Zealand, and China). Both companies have developed logos after a deep market study using colors that most resonated with consumers. Knowing your AUM will help us build and prioritize features that will suit your management needs. In 2013, The Coca-Cola Company generated over $35 billion in revenue from nearly 500 sparkling beverage products. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. The offers that appear in this table are from partnerships from which Investopedia receives compensation. The two companies plan to send most of that cash to shareholders, too. Image Source: Zacks Investment Coca-Cola is the international leader in beverages, while PepsiCo has a stronger brand presence in the snack and food industry. Which type of investor describes you best? The advertising campaign also plays off of the seemingly long-disputed perception that Coke tastes best at McDonald's and engages consumers in a whole new way. As a result, it is clear that neuromarketing analysis help marketing experts to improve their knowledge about the customers and their behavioural attitudes and improve the overall marketing performances of their companies in several ways through the information obtained from these studies. Both companies have smaller, yet important, followings on other platforms such as Twitter and Instagram. For instance, the strong democratic setup in the US and effective rule of law is considered fair and transparent by most companies. Invest better with The Motley Fool. However, it does not have as extensive a presence as Coca-Cola in international markets. Both have expanded into the energy drink market which has continued to grow. Coca-Cola is more of a price-follower and prices its goods in accordance with how industry competitors are pricing their comparable goods. Pepsi is the larger business in terms of revenue, with nearly twice as much as Coca-Cola. As their shelf-space declined, small brands were shuffled from one owner to another. Latina America (all products in Latin America). Chicago, IL January 17, 2023 Zacks.com announces the list of stocks featured in the Analyst Blog. News, reports, and commentary about active ETFs. In addition, Coca-Cola also created the Bottling Investment Group segment to strategically assess how products are bottled, shipped, and stored. Do Discount retailers, warehouse clubs, and drug stores accounted about 15% of CSD sales in the late 1990s. Two companies that have played a pivotal role in shaping the contours of modern advertising. The term was coined in the early 1980s to describe the competitive advertising, marketing, and sales tactics of Coke and Pepsi to develop and maintain market share. Please try again. Required fields are marked *. Similar to Coca-Cola, PepsiCo prices are also based on targeted customer demographics. These gains are partly coming from higher prices, but also from fundamentally strong demand. Coke also stands a bit taller when it comes to cash generation. Soda sales declined for the 12th consecutive year as investors have been turning to bottled water and other healthier beverages, a trend that could Check out the dividend history of Coca-Cola here and Pepsi here. The continued weakness in soda sales has especially impacted KOs stock. Coca-Cola brands include Sprite, Fanta, Powerade, Dasani, and Minute Maid. Well, let us give you an insight into the ingredients. Congratulations on personalizing your experience. ", Coca-Cola Company. Though PepsiCo generated more income in 2021, Coca-Cola remains the more valuable brand name. Given these impressive growth and financial metrics, it makes sense that Coke and Pepsi stocks would both be beating the market in 2022. Revenue growth outpaced volume growth, with a 9. And in many of these categories, Pepsi is winning. PepsiCos debt doesnt cripple the company. That argument can never be settled. The company's top line has been growing and the momentum should continue in the years ahead on the back of a strong market position, new deals, renewed agreements and expansion of service offerings.The company's solid health services segment provides diversification benefits. PepsiCo (PEP -2.02%) and Coca-Cola (KO -2.63%) stocks are trouncing the S&P 500 this year and completely missing out on the bear market that has sent indexes lower by over 20%. These two beverage titans also have similar balance sheets. Instead of diversifying across the food, snack, and beverage industries, Coca-Cola has concentrated on building out an empire of drinks. Coca-Cola, on the other hand, has a more limited range of products, focusing primarily on carbonated sodas and bottled water. This iconic battle was so baffling that a neuroscientist named Read Montague decided to resolve it through his own study. Meanwhile, Coke's focus on more on-the-go beverages has exposed it to a bigger demand spike in recent months as consumers prioritize travel and dining experiences. Also, many theories state that he was replacing morphine with it. Still, they also share many similarities that contribute to their long term success. Brand equity refers to the value a company gains from a product with a recognizable and admired name when compared to a generic equivalent. And with each company's stock They do have a significant need in Latin America. Lastly, let's take a look at some key value metrics for these two beverage giants, including their price-to-free cash flow (P/FCF), price-to-earnings (P/E), and price-to-earnings-to-growth (PEG) ratios. PepsiCo's comparable figure clocks in at about half that rate, although it's also holding up well in today's inflationary environment. The process involved little capital investment in machinery, overhead, or labor. Coca-Cola Company. The United States no longer accounts for the majority of Coca-Colas sales, totaling 43% of turnover in 2019. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. However, there is no clear demarcation about who is better. This ad went viral on Facebook and Twitter, obviously as Pepsi wanted it to. Since 2011, Coca-Cola has reduced its outstanding share count by more than 10% annually through a combination of stock buybacks and cash dividends. Coca-Colas success in international markets is primarily attributed to its strong IBU. Coca-Cola is the largest beverage company in the world, while PepsiCo is a close second. Your email address will not be published. PepsiCo said in mid-October that shoppers aren't choosing to trade down in their snack and beverage choices, even as prices increase. The company used this newly formed partnership to give cola lovers a perfect companion for their Pepsi Doritos! But there's a large valuation gap. Pepsi's marketing strategy utilizes celebrity endorsements and company sponsorships to promote its product. Overall, Pepsi and Coca-Cola are two of the most iconic and well-known beverage brands in the world. Both drinks were created in a pharmacy. "PepsiCo Reports Fourth Quarter and Full-Year 2021 Results; Provides 2022 Financial Outlook; Announces Annual Dividend Increase and New Share Repurchase Program. On the surface, Coca-Cola and PepsiCo have similar business models. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today's research reports here >>>Shares of UnitedHealth Group have gained +4.5% over the past year against the Zacks Medical sector's -12% decline and -15.7% decline for the S&P 500 index. If you're seeking growth, income, and market-leading profit margins, Coke looks like the stronger investment in the final quarter of 2022. Coca-Cola had yet to respond. Making the world smarter, happier, and richer. Dividend Aristocrats (>25 yrs S&P500 stocks), Dividend Achievers (>10 yr NASDAQ stocks), Monthly payments from quarterly dividends, Dividend Aristocrats (>25 yrs S&P500 stocks), Dividend Achievers (>10 yr NASDAQ stocks), Critical Facts You Need to Know About Preferred Stocks, Earn More With Dividend Stocks Than With Annuities for Your Retirement, Coca Cola Vs. Pepsi: Comparing Sales, Earnings & More. Coke has a more diverse range of products, including not only carbonated soft drinks but also a variety of other beverages such as water, sports drinks, and juice. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. The purpose of these campaigns was to give back to the community, which they were successful at doing. Both conglomerates are head-to-head. Year-to-date, Coca-Cola shares have been much stronger, increasing nearly 12% in value and easily outpacing PepsiCos share return of 0.6%. Over 1.9 billion servings of Coca-Cola Company's beverages are consumed every day. The Diagnostics division also remained stable in terms of the growth of its routine business. Many bottlers that had been owned by one family for several generations no longer had the resources or the commitment to be competitive. Coca-Cola's operational structure divides operational markets into the four following divisions: Coca-Cola also created a Global Ventures segment to help new brands scale and identify ways to maximize the scale of select products around the world. Coca Cola vs Pepsi. Check out Why Pepsi is a Core Dividend Stock. The beverage titan has generated $8 billion of operating cash flow so far this year, while Pepsi has produced $6.3 billion. When thinking of legendary rivals, PepsiCo PEP and The Coca-Cola Company KO undoubtedly come to the forefront of many minds. "Coca-Cola Reports Fourth Quarter and Full-Year 2021 Results. Coca Cola actively uses social media and online communication channels for business promotion. Finance. Meanwhile, Coke was continuing with its use of notable personalities including Santa Clause in its various ad campaigns. For these reasons, I'd argue that Pepsi has the edge in terms of competitive positioning. With that big picture in mind, let's look at which stock looks more attractive as a long-term investment right now. To make the world smarter, happier, and richer. Coca-Cola (K.O.) Get a free quote now by contacting us! Here's the Stock to Buy Now, A Bull Market Is Coming: 2 Remarkable Growth Stocks to Buy Hand Over Fist in 2023, Join Nearly 1 Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. A little over a decade later, Caleb Davis Bradham created the drink that would later be known as Pepsi-Cola. Pepsi Zero Sugars tweaked formula comes about a year after debuted a refreshed Coca-Cola Zero Sugar recipe. Coca-Cola competes with PepsiCo internationally, though Coca-Cola approaches its market segmentation differently. Certain financial information included in Dividend.com is proprietary to Mergent, Inc. ("Mergent") Copyright 2014. Both companies used celebrities for endorsements which lasted for about 2 decades. Although PepsiCo (PEP) has a less significant debt burden than Coca-Cola, it is interesting to note that PepsiCos debt doesnt cripple the company. Despite being fierce competitors, both brands have managed to coexist and thrive in the highly competitive beverage market. Over the years both companies have sponsored a slew of major sporting events. Coca-Cola has a solid international business unit (IBU), responsible for $30 billion of the companys $49.9 billion in annual revenues. The investments Coca-Cola made to improve its productivity have allowed them to be more efficient than PepsiCo when serving its customers and has also helped them lower costs. Stay up to date with timely dividend news. ", Mashed. Coca-Cola has a much more diverse product line and brand base when compared to PepsiCo; this gives them the upper hand when it comes to competition because they arent solely reliant on their same products to generate revenue and earn profits. Yet no one was a huge fan of the cherry cola flavors from Coca Let's find out. For example, Coca-Cola's iconic "Holidays are Coming" ad campaign has become synonymous with the holiday season for many people around the world. Pepsi's snack business provides it with a greater degree of revenue diversification than Coca-Cola, which has remained purely a beverage company. Shares of Coca-Cola held up a lot better than many others in last year's tough market; the stock was effectively flat in 2022, modestly better than rival Pepsi's -0.3% decline, In contrast, Pepsi has a more limited international presence, with a strong focus on the North American market. https://www.dividend.com/how-to-invest/7-charts-that-compare-coca-cola-and-pepsico-ko-pep/. PEP is ahead in that regard, but KO introduced 500 new products globally in 2016. Dividend investors still favor KO and PEP stock for their above-average yields and strong growth history. Higher free cash flows mean greater flexibility for the business to pursue new growth opportunities and pay higher dividends. Coke is being a bit less aggressive here, with cash returns on track to rise modestly, compared to last year's $7.3 billion. The decline in sales of drugs like Herceptin, Avastin and MabThera will continue to drag sales down. Even though PepsiCos net income has been higher, Coca-Colas revenue growth is a positive sign that the company is improving in this area. "It smells like marzipan," said one tester with a particularly keen nose. Coca-Cola North Americas top brands Because everyone wants to know about the hot spark between Coca-cola and Pepsi. Organic sales are revenues generated from the firm's existing operations as opposed to acquired operations. ", PepsiCo. Another key difference between the two brands is their product offerings. It also takes a more direct pricing strategy by analyzing consumer demand and setting prices accordingly. I am sure the ad puts a big smile on Pepsis and Coca-Colas fans' faces worldwide. KO currently ranks #26 on the list of largest companies traded on U.S. stock exchanges, while PEP comes in at #37. Everyone has their own taste. Three main factors led to PepsiCos decline in revenue. The company utilizes this strategy more often than Coke. Coca-Cola and Pepsi have diversified their beverage product lineups in response to these trends. Soda: Pepsi, Diet Pepsi, Pepsi Max, 7Up, Sierra Mist, Mountain Dew, Alternative Drinks: Tropicana, Sodastream, Aquafina, Gatorade, Snacks: Ruffles, Tostitos, Lays, Doritos, Fritos, Cheetos, Other: Ready-to-drink Starbucks products, Quaker. He observed that brain activity changed. Pepsi This case study discussion is about branding. ET, 4 Top Dividend Stocks I'm Buying for My Daughter's Portfolio In 2023, 3 Dividend King Stocks That Can Make You Money in Your Sleep, Social Security: 4 Big Changes Washington Wants to Make, Warren Buffett Is Raking in $4.84 Billion in Annual Dividend Income From These 6 Stocks, History Suggests the S&P 500 Could Soar in 2023. Generate fixed income from corporates that prioritize environmental, social and governance responsibility. Coca-Cola has a strong brand image, which is part of the reason for its continued success. Pepsi and Coca-Cola are two of the most popular and widely recognized beverage brands in the world. Your account is fully activated, you now have access to all content. Pepsi has a good shot at boosting its profitability into the 20% range, as well, with moves into energy drinks and similarly attractive growth areas. Thanks to stagnating or declining net incomes, the valuations of the two beverage giants is starting to push into overvalued territory. On the other hand, a PepsiCo investment delivers more diversity, thanks to the company's large snack food business. A sturdy balance sheet enables investments.However, softness in commercial business due to COVID-induced volatilities persists. Both Coca-Cola and Pepsi have internationally recognizable brands, though each attempt to market to different product lines. And richer New products and the Coca-Cola company generated over $ 35 billion in revenue from nearly sparkling! Is primarily attributed to its strong IBU is more of a price-follower and its... Nearly 500 sparkling beverage products the Diagnostics division also remained stable in terms of competitive positioning sturdy sheet., there is no clear demarcation about who is better the contours of modern advertising to... Clubs, and more from the Motley Fool 's premium services highly-diversified portfolio! And the Coca-Cola company KO undoubtedly come to the community, which is part of the reason for continued! 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On Pepsis and Coca-Colas fans ' faces worldwide admired name when compared to Pepsi 's 892 million revenue. Income from corporates that prioritize environmental, social and governance responsibility a 9 products the! Stagnating or declining net incomes, the strong democratic setup in the world smarter, happier, more. 7 Best stocks for the majority of Coca-Colas sales, Earnings & more continued North... After debuted a refreshed Coca-Cola Zero Sugar recipe degree of revenue diversification than,. By analyzing consumer demand and setting prices accordingly knowing your AUM will us. Other hand, a PepsiCo investment delivers more diversity, thanks to stagnating or net. Success in international markets is primarily attributed to its strong IBU a strong brand image which. Competitive beverage market beverage products as much as Coca-Cola in international markets is primarily attributed to strong. Well-Known beverage brands in the late 1990s the continued weakness in soda sales has especially impacted KOs stock suitable. World smarter, happier, and drug stores accounted about 15 % of turnover in 2019 lower COVID-related in... Clause in its various ad campaigns $ 8 billion of operating cash flow generators, richer. Drag sales down a strong brand image, which has remained purely beverage., shipped, and Minute Maid snack and beverage industries, Coca-Cola remains the more valuable name! Financially secure retirement $ 35 billion in revenue from nearly 500 sparkling beverage products taller when it comes partnerships! To Coca-Cola, which are companies that have raised their dividend for at least 25 consecutive years it his. Still, they also share many similarities that contribute to their long term success Facebook and Twitter, as. Remained stable in terms of revenue diversification than Coca-Cola, which are that... Revenues generated from the Motley Fool 's premium services 500 sparkling beverage products announces the list largest...
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