PepsiCo, Inc. (PEP), Dr Pepper Snapple Group Inc. (DPS): The Coca-Cola Company (KO) Fizzles and Pops

Coca-Cola has outperformed PepsiCo, Inc. (NYSE:PEP) over the past three years, with stock appreciation of 52% versus 35%, and it offers a slightly higher yield of 2.9% versus 2.8%; but if you look at the past decade, it’s pretty much a dead heat.

Coca-Cola data by YCharts

Dr Pepper Snapple Group Inc. (NYSE:DPS) has seen stock appreciation of 68.6% over the same period. Dr Pepper Snapple Group Inc. (NYSE:DPS) is a much smaller company, but it’s still capable of stealing market share. It’s currently trading at 16 times earnings, which makes it cheaper than Coca-Cola and PepsiCo, Inc. (NYSE:PEP) at 20 times earnings and 19 times earnings, respectively. It also yields a moderately higher 3.4%.

Additionally, with 50+ brands, it’s well diversified. These brands include Dr Pepper Snapple Group Inc. (NYSE:DPS), 7-Up, Mott’s, Canada Dry, Yoo-hoo, Hawaiian Punch, and Sunkist. However, while Dr Pepper is likely to be a solid investment, it’s not on the same playing field as Coca-Cola and PepsiCo, Inc. (NYSE:PEP).

Conclusion

Coca-Cola is seeing declining demand for sparkling beverages, but management was wise to seek out other high-demand markets where it could grow. This strategy has paid off, and this trend is likely to continue. Therefore, while the reasons might be different than in the past, Coca-Cola remains a top-tier long-term investment option.

The article Coca-Cola Fizzles and Pops originally appeared on Fool.com and is written by Dan Moskowitz.

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

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