The Coca-Cola Company (KO), Dr Pepper Snapple Group Inc. (DPS), PepsiCo, Inc. (PEP): Why Strategy Matters

However, it appears Dr Pepper Snapple Group Inc. (NYSE:DPS) trades for a measurable discount for a good reason, which is its underwhelming growth over the past five years. Since 2008, it’s grown its sales by just 1.2% compounded annually.Moreover, its balance sheet has deteriorated: The company’s shareholder equity and total assets have declined, while its debts have grown. As a result, investors would be wise to focus on its two larger peers.

Valuation and strategy make Pepsi the beverage stock to buy

Pepsi holds a more attractive valuation than Coca-Cola at recent prices, and in my estimation, a better outlook. Consumers are widely adopting healthier lifestyles, shying away from traditional high-calorie sparkling beverages. To be fair, Pepsi still holds many products that don’t exactly cater to healthy living, but at the same time it isn’t blindly denying the trend to the extent Coca-Cola is.

Pepsi has meaningfully split its business between food and beverages, and within each category, owns plenty of brands that appeal to calorie-conscious consumers. As a result, despite Coca-Cola’s attractive emerging market growth potential, I believe the future to be brighter for Pepsi thanks to its visionary management.

The article PepsiCo: Why Strategy Matters originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura 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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