Which Is A Better Investment – Coca-Cola Stock Or Pepsi Stock? (The Winner May Surprise You)

Want a great consumer-facing business to invest in? Looking for safe, growing passive dividend income while you sleep soundly at night? Wondering if Coca-Cola or Pepsi is the better stock for long-term investment?

High-quality dividend growth stocks are some of the best long-term investments you'll find. After all, the only way a dividend grows like clockwork for decades on end is if profit is growing like clockwork for decades on end. As you might imagine, only the best businesses in the world can manage to do that. But even great businesses can be less great than other great businesses. There are degrees of greatness.

Today, I want to compare two of the best dividend growth stocks out there - Coca-Cola (KO) and Pepsi (PEP). I'm putting two heavyweight food and beverage titans up against one another in a battle royale. Let's see who comes out on top.

They're both giants in the consumer staples space. And I'm going to pit them against each other in three head-to-head rounds.

The first round will be fundamentals. The second round will be qualitative aspects like competitive advantages and risks. The third and final round will be valuation.

First, dividend metrics. Coke has Pepsi beat in terms of its dividend growth streak - 59 consecutive years to 48 consecutive years. Coke also has a higher yield, but barely - 3.1% to 3%. Pepsi's 10-year dividend growth rate of 7.8% easily beats Coke's 6.4%. And Pepsi has a much lower payout ratio - at about 80% compared to Coke's dangerous 100%.

So far, based on dividend metrics, I'm giving the edge to Pepsi.

Moving on to business growth, Pepsi starts to extend its lead. Revenue for Pepsi is up modestly over the last decade, while Coke's revenue is actually down sharply. Now, there has been a lot of reshuffling going on over at Coke with bottlers, so it's not totally apples-to-apples. But there's still a difference there.

It's the same story with EPS. Pepsi's EPS has a CAGR of 2.7% over the last decade, whereas Coke's EPS is basically flat over the last decade.

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Disclaimer: Please consult with a licensed investment professional before investing any of your money. Never invest in a security or idea featured on this channel unless you can afford to lose ...

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