How PepsiCo, Inc. (PEP) Is Set for a Cola Showdown

The past year saw the company buy a 50% stake in the beverage business of the Middle Eastern leader, Aujan Industries. The deal would enable The Coca-Cola Company (NYSE:KO) to capture the Middle Eastern market thereby allowing it to secure a decent share of the high-growth oriented Middle Eastern market.

The above move evidences the company’s strategy of setting its foot in developing high-growth markets in an attempt to solidify its competitive position.

Dr Pepper Snapple Group Inc. (NYSE:DPS) is another competitor on the soft-drinks scene.

Founded in 2008, this company is much younger compared to its giant competitors. Nevertheless, in its short span of existence, the company has managed to develop a portfolio of 50 assorted brands which includes 6 of the 10 leading non-cola drinks. The company is known to provide adequate returns to its shareholders which 0are evident from its declaration of 5^th consecutive increase in dividends recording a 12% increase in its quarterly dividend in Q4 2012 compared to Q3 2012.

Moving forward as the company establishes its brand and taste in the hearts and minds of people, Dr Pepper Snapple Group Inc. (NYSE:DPS) is sure to gain in the long run and become a major player in the beverages market not just in North America but as a formidable competitor in the world market.

Foolish potential

With rapid growth of emerging economies and massive change in the lifestyles of people driven by higher disposable incomes, growth in the beverages market is inevitable.

PepsiCo, Inc. (NYSE:PEP) has positioned itself well to reap the benefits of such change as is evident from its forward-looking strategy and consistent financial and operational performance.

Considering the above factors I believe in the medium to long term, PepsiCo, Inc. (NYSE:PEP) is a worthwhile addition to your portfolio.

The article How PepsiCo Is Set for a Cola Showdown originally appeared on Fool.com and is written by Rashmi Singh.

Rashmi Singh has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of PepsiCo. Rashmi is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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