It is practically impossible not to look at coca cola(Nyse: ko) If you are thinking about buying Pepsico(NASDAQ: PEP) vice versa. The two companies are dominant drink giants in the world. However, the price graphics of the stocks look completely different today. If you are a long-term long investor, Pepsico looks most attractive after the last Coca-Cola gathering. This is the reason.
Coca-Cola makes a wide range of drinks. Basically, this is all he does. The company does this very well, with a huge global distribution network, research and development acumen, and marketing skills that put it in the consumer Staples sector. It also has a volume of work as a uniform in the industry, the purchase of companies with attractive products and their simplicity by connecting new products in the Coca-Cola distribution system. It is one dowry, but it is a very good trick.
Photo source: Getty Images.
Pepsico makes a wide range of drinks. It also makes a wide range of snacks and bottled food products. It has a huge global distribution network, a strong research and development section, and a good marketing team like Coca-Cola. As for the scale, Pepsico has a long history of buying and expanding smaller brands, just like Coca-Cola. The latest endeavor in this front on this front is the American -Mexican food maker, which serves both snacks and bottled food.
Pepsico may not be a beverage company like Coca-Cola; Pepsi Cola fell to third in the cola wars. However, it is the brand of snacks number 1 and number 2 in the wider drink space. In packed food, he carries himself against their greatest peers. In other words, it is a good -term and varied food company. Investors who love various businesses are likely to prefer based on this fact alone.
However, both Coca -Cola and Pinsico are a profit kings, which talk about their basic strength. Coca-Cola’s profits are slightly longer, but the company simply cannot increase its profits for 50 years without a good business plan that is well implemented after a year. These two companies of consumer nutrients stand to the soles of the feet as companies, except for diversification.
However, each company is present for a long time enough will go during good periods and bad periods. Currently, Pepsico faces some weak work while Coca-Cola is better carried out. Investors realize division, purchase and sale accordingly. If you look at the graph below, it seems that the two companies have turned places. But short -term business courses are not what investors should worry in the long run. The biggest question is whether the company, whether it is Coca -Cola or Pepsico, is still working well.
Pep data by ycharts
The answer is that both giant consumers are well, but Coca-Cola achieves a little better performance at the present time. The Pepsico problem is in fact a relative problem because it was able to pay the high prices when inflation was followed in the wake of the Koronavirus virus. This reinforcement has ended now, and “only” organic sales of 2 % and the basic profits of 9 % in 2024. It calls for similar performance in 2025, with low -number two -digit sales and two -number profits growth. This is actually not bad in the consumer food sector, known as a slow and steady performer.
Based on this news, investors punished stocks, which decreased by 20 % of its peak in 2023. The decrease Pepsico pushed towards the highest levels of the company’s history. The price ratios for selling and the price ratios to profits are less than the average of five years. This is a good manner that appears to be placed on the sales shelf.
Compared, Coca-Cola has increased in recent months. The revenue of profit distributions is not anywhere near the historical highlands of the share. The price ratios to the sale and the price rates to the profits are now higher than the average of five years. Before the assembly, Coca-Cola was at a more persuaded price, but now it looks somewhat expensive. This makes Pepsico look more attractive, given their direct competitor in the beverage sector.
None of this is aimed at noting that Coca-Cola is a bad company. In fact, it is a very good company. It is not a convincing value like Pepsico, and it is a good company as much, now. The reason is more related to the vision of the Kurds of the 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 has exceeded the historically high return by 3.5 % more attractive after the Coca-Cola prices raised.
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He continues.
*The stock consultant dates back from March 3, 2025
Reuben Gregg Brewer has positions in Pepsico. There is no position in Motley Fool in any of the mentioned stocks. Motley Fool has a disclosure policy.
Why does the Coca-Cola Rally make Pepsico more attractive shares originally published by Motley Cooh
