Coca-Cola vs. PepsiCo: Which One Will Make You Richer?

When it comes to the beverage and food segment of consumer packaged goods, Coca-Cola (KO 0.35%) and PepsiCo (PEP 0.77%) are in leagues of their own. They both own household-name products and have distribution across the globe. They’re also stock market staples with decades of consistency and annual dividend payout increases.

Both companies can be good pieces to a portfolio, but if you’re looking for the one that can make you richer, the answer depends on the potential route you want to take.

Image source: The Motley Fool.

A key difference between Coca-Cola and PepsiCo is that Coca-Cola focuses solely on beverages, while PepsiCo sells beverages and snacks. This has led to Coca-Cola operating more efficiently, but PepsiCo being more diversified and less dependent on a single category. Its revenue is routinely double Coca-Cola’s.

At their sizes, neither company will have tech-like growth, but PepsiCo is currently returning more value to its shareholders than Coca-Cola. PepsiCo is increasing its dividend at a faster rate (up 89% in the past decade versus 51%), buying back more stocks, and offering a higher initial dividend yield.

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NASDAQ: PEP

PepsiCo

Today’s Change

(-0.77%) $-1.22

Current Price

$156.50

Key Data Points

Market Cap

$214B

Day’s Range

$156.29 - $159.11

52wk Range

$127.60 - $171.48

Volume

5.5M

Avg Vol

8.1M

Gross Margin

54.36%

Dividend Yield

3.64%

If you’re looking for a more sure path, Coca-Cola is the one. It’s efficient, high-margin, and safe. If you’re looking for higher upside from this point forward, PepsiCo should be your choice. It’s diversified and returning value to shareholders at a high rate.

Again, don’t expect tech-like returns from either company, but they’re both Dividend Kings – companies that have raised their dividends for at least 50 consecutive years – that can produce consistent income and continue to grow over time.