Is PepsiCo, Inc. (PEP) Poised for a Bubbling 2013?

Even with PepsiCo, Inc. (NYSE:PEP)’s equity stability and consistent dividend returns, it’s still underperforming vs. the S&P 500, while Coke is more in line with the index, though neither are particularly good investments right now for those that want to see big, fast returns on investment. If I had to recommend one of these companies, Pepsi looks like the better long-term bet right now because Coke has taken on more debt and liabilities this past year, which has hurt the company’s equity figures. Pepsi’s boost in marketing investment could be a sign of a long-term push for the company, which appears necessary given a huge gross profit drop last quarter, though the effect on net and operating incomes was minimal. Still, you can’t beat a 41 year run of dividend increases, and if the profit decline is only due to added investment, rather than added debts and liabilities, PepsiCo, Inc. (NYSE:PEP) can be a safe investment opportunity, even though it will take a lot to outperform the S&P, and gains will be on the low side, making it a stable stock, but by no means exciting. Coke will have some problems in the future if it doesn’t bring its liabilities down, especially with deferred debt payments.

It will be an interesting earnings season for these two companies after lackluster years for both companies. Will Pepsi get more fizz as Coke goes flat? That is the question.

John McKenna has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of PepsiCo.

The article Is Pepsi Poised for a Bubbling 2013? originally appeared on Fool.com.

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