This gives the product a distinctive edge overtime. 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. 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. Have we mentioned how wonderful our client service is? This trading strategy invovles purchasing a stock just before the ex-dividend date in order to collect the dividend and then selling after the stock price has recovered. This difference shows up in operating profit margin. Every product has a life cycle, and reevaluating it at each phase is considered important to managing its commercial success. For over 20 years weve been pioneering in the beverage industry as one of the leading providers of beverage machinery for food manufacturers around the globe. 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 North Americas top brands His research was in line with the original campaign Pepsi was preferred. Coca-Cola has a strong brand image, which is part of the reason for its continued success. The company has also used its strong cash flow to reduce its debt; they could reduce its net debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio from 2.2 in 2010 to 1.7 in 2012. As Americans become more concerned with sugar, chemicals, and the sustainability of packaging, the operations, product lines, and pricing of both companies will be impacted. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Both conglomerates are head-to-head. Worth $125.3 billion in 2020, the sugar-free carbonated drink market is expected to reach $243.5 billion by 2030. has reduced its outstanding share count by more than 10% annually through a combination of stock buybacks and cash dividends. Since then, the rivalry between the two drinks has never stopped. The Coca-Cola Company (KO) and PepsiCo (PEP) are two of the premier global consumer brands. Coca-Cola has a centralized focus on the beverage industry, though they've emerged in Pepsi's stock is nearly 20% less expensive than Coca-Cola's in terms of price to free cash flow. The competition is stiff for Tecentriq. 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, large and steadily growing market opportunity, Copyright, Trademark and Patent Information. "Global Ventures (GV). CarDekho Success Story - How It Finds the Right Cars for the Users? The United States no longer accounts for the majority of Coca-Colas sales, totaling 43% of turnover in 2019. Sales Tax for an Their product lines include: Coca-Cola measures operations by dividing its products between sparking beverages (carbonated beverages) and still beverages (non-carbonated products). Why do Residential Areas need Security Services? The Motley Fool has a disclosure policy. Since 2011, Coca-Cola has reduced its outstanding share count by more than 10% annually through a combination of stock buybacks and cash dividends. All junk foods are incomplete without this cold beverage. Coca-Cola has a more significant presence worldwide with a solid coca-colalogistics processthan PepsiCo because Coca-Cola was founded in Atlanta, Georgia (USA). Pipeline setbacks are a concern.Nevertheless, strong demand for new drugs, namely Hemlibra (hemophilia), Ocrevus (multiple sclerosis), Evrysdi (spinal muscular atrophy), Phesgo (cancer) and Tecentriq (cancer), maintained momentum. Certain financial information included in Dividend.com is proprietary to Mergent, Inc. ("Mergent") Copyright 2014. PepsiCo does not have a substantial presence in Asia, the Middle East, and Africa combined; it only holds around 3% of these regions nonalcoholic beverage market share. Pepsi was relatively new and looking to capture a sizeable market portion. "Bottling Investment Group (BIG). What Should a US Startup Go For - Business Loan or Funding? Cost basis and return based on previous market day close. Enacting the adage If you cant beat them, join em, they came up with New Coke that was similar in taste to Pepsi. * Dividend.com does not provide financial advice and does not issue recommendations or offers to buy stock or sell any security. However, for both brands, the future is more about hand-in-hand as the market and consumers evolve. Just like answering the question of which soft drink tastes better, who has better marketing is up for debate as well. Their share of the global beverage market is 36%. 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. Coca-Cola had yet to respond. Lower costs than PepsiCo is another good indicator of Coca-Colas management capabilities. Schedule monthly income from dividend stocks with a monthly payment frequency. ", Coca-Cola Company. KO is primarily a beverage business, but PEP generates around half of its sales from food brands such as Doritos, Frito Lay and Quaker Foods. Conclusion When it comes to Cola lovers, they have strong opinions regarding the longstanding rivalry of the two drinks, Coke and Pepsi. ", Coca-Cola Company. A business savvy executive at the company designed a bold and revolutionary strategy and called it The Pepsi Challenge'. Let's now take a look at some key financial metrics to see how Coca-Cola and Pepsi stack up. Required fields are marked *. In 2020, PepsiCo had 23 different brands with over $1 billion of annual sales. Because of the possibility of human or mechanical error by Mergent's sources, Mergent or others, Mergent does not guarantee the accuracy, adequacy, completeness, timeliness or availability or for the results obtained from the use of such information. With impacts to restaurants, dining out, consumer preferences, and distribution capabilities, both companies are also emerging from the COVID-19 pandemic. Coke also stands a bit taller when it comes to cash generation. PepsiCo Beverages North America (beverages in the United States and Canada). Now people were again talking about Coca-Cola New Coke vs. Coke Classic. Coca-Cola has made more progress in reducing its debt than PepsiCo is also a good indicator of Coca-Colas management capabilities. Also, history had shown that explosions in demand for alternative drinks were regularly followed by slow or negative growth. 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. But Pepsi went a step further. Free cash flow is essentially what is left over after a company pays all of its bills and reinvests back into its business. 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. As their shelf-space declined, small brands were shuffled from one owner to another. Soda sales declined for the 12th consecutive year as investors have been turning to bottled water and other healthier beverages, a trend that could Quickest stock price recoveries post dividend payment. However, overall soda sales have declined steadily for much of the past decade-- a trend that's likely to continue for the foreseeable future. Model portfolio targeting 7-9% dividend yield. To make the world smarter, happier, and richer. Let's find out. Our company specializes in manufacturing machinery for bottling beverages - that's our logo, a bottle. Coca-Cola sounded a similar tone more recently, saying on Oct. 25 that the company is winning market share across a wide range of price points. While KOs net income has been trending downward in recent years, it manages to stay ahead thanks to superior margins. PepsiCo wasnt founded until 1965. Both Coca-Cola and PepsiCo are global leaders in the beverage industry, offering consumers hundreds of beverage brands. Douglas Daft assumed leadership in April 2000; one of his first moves was to lay off 5,200 employees, or 20% of worldwide staff. Operating profit also improved by 9% in 2004 but only 7% in 2005 which is in contrast to Pepsi. According to MSNBC , Diet Coke sold 927 million cases in 2010, compared to Pepsi's 892 million. Eventually, it became so popular that it outsold other beverages such as coffee, tea, and even alcohol. These include white papers, government data, original reporting, and interviews with industry experts. ", Mashed. Coca-Cola has significant debt loads, which can be attributed to the companys acquisition of CCE in 2010. Coca-Cola (KO 0.36%) and Pepsi (PEP-0.31%) have delivered steadily rising cash payouts and solid total returns to investors for decades. Using a data-driven approach, the program will provide you with a global mindset capable of operating globally as well as in a variety of national environments. Perhaps just as impressive as their streak of consecutive dividend increases is the rate at which KO and PEP have grown their dividends. Great! The P/E ratios of both stocks have been climbing steadily over the past five years and now sit above that of the S&P 500. Sales of Actemra/RoActemra and Ronapreve (COVID-19) are declining with the pandemic weakening in several countries since last year. Coca-Cola Company. Africa, Middle East, and South Asia (all products in Africa, Middle East, and South Asia). ", Sure Dividend. For more than a century and traveling different paths, both these companies have created a niche for themselves. PepsiCo's product offerings are more diverse, but Coke has a better margin profile. Wall Street can't seem to get enough soda and snacks right now. Overall, Pepsi and Coca-Cola are two of the most iconic and well-known beverage brands in the world. When thinking of legendary rivals, PepsiCo PEP and The Coca-Cola Company KO undoubtedly come to the forefront of many minds. Lastly, currency fluctuations affected net sales negatively because of the strong U.S. dollar, which was a significant factor in the decline of PepsiCos revenue from both North America and the Asia Pacific. More and more people are turning away from high-sugar drinks, as well as those containing artificial sweeteners, which has dented sales of Coke and Pepsi and their diet versions. From 2004 to 2005, they had an increase of 2% in their current assets. Water: Dasani, Glaceau SmartWater, and Vitaminwater, Other: Body Armor, Monster Energy, Dunkin' Donuts. Instead of diversifying across the food, snack, and beverage industries, Coca-Cola has concentrated on building out an empire of drinks. 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%. Lorem ipsum dolor sit amet, consectetur adipiscing elit. 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. Our picks from the +200 dividend stocks paying a monthly dividend. Chicago, IL January 17, 2023 Zacks.com announces the list of stocks featured in the Analyst Blog. Pepsi This case study discussion is about branding. Learn more about dividend stocks, including information about important dividend dates, the advantages of dividend stocks, dividend yield, and much more in our financial education center. The operating expenses for both companies were higher in 2005 then 2004. In PepsiCo's fiscal year ending 12/25/2021, 60% of net company revenue was generated by the three North America division lines, and the Frito-Lay North America division was responsible for approximately half of the company's operating profit for the year. The Motley Fool has a disclosure policy. Pepsi has traditionally positioned itself as a young and hip brand, with a focus on younger consumers. Both companies regularly produce commercials for the Super Bowl, while PEP is in the midst of a 10-year contract to sponsor the halftime show. Coca-Cola Company is one of the most recognized brands globally, with a market cap above $182 billion. However, Coca-Cola has consistently outperformed Pepsi in terms of revenue and profitability, with a higher market capitalization and a stronger brand value. Practice management news, reports, video and more. PepsiCo has a less significant debt burden than Coca-Cola. 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. Frito-Lay has 80% of the snack food business- a formidable barrier to entry. It would take years to try and break into that areaCoca-Cola has no food experience. So everything is liquid based. Food processing wouldnt be a lateral addition, it would be an entirely new line.Coca-Cola has mastered liquid delivery. From processing to delivery to ads. Annual Revenue Coca Cola: $35.2 Billion Pepsi: $57.8 Billion 13. This time the test results were in favor of Coca-Cola. Zacks Investment Research. It reaches only 31% of the worldwide market share for nonalcoholic beverages with a goodbottled water profit margin. 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. The flavor of Pepsi is sweeter so it's stronger initially and you taste it faster. Coke is less sweet and a little bit smoother than Pepsi. Pepsi has more sugar and caffeine than Coke. As Malcom Gladwell wrote in his 2005 book "Blink," in which he discusses the differences at length, "Pepsi, in short, is a drink built to shine in a sip test." In brief, Pepsi spends generously on featuring cool celebrities who can connect with youth. Till today, Pepsi is sugary and has a citric taste that makes its consumers prefer Pepsi over Coke. 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