CATL Shares Clouded by Bleak Outlook After Mega Hong Kong Debut
Shenzhen-listed shares are down nearly 9% from a high in May, weighed by concerns over heightened competition in China's market, US tariff threats and slowing demand. The Hong Kong stock remains 18% above its listing price, though there are large wagers on a decline.
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Bloomberg
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Trump's Vietnam Deal Shows China Tariffs Won't Fall Much Further
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Is PepsiCo A Better Stock Than Coca-Cola?
EDMONTON, CANADA - FEBRUARY 15: A Coca-Cola advertisement board with the slogan 'Enjoy! Coca-Cola' ... More stands outside a restaurant in Edmonton, Alberta, Canada, on February 15, 2025. (Photo by Artur Widak/NurPhoto via Getty Images) PepsiCo's stock (NASDAQ:PEP) has significantly lagged this year, recording a 10% decrease, while its competitor, Coca-Cola stock (NYSE:KO), has experienced a 16% rise. This contrast is mainly attributed to the sluggish North American operations for PepsiCo. The company has encountered a decline in consumer interest for its Frito-Lay snack sector and has dealt with a substantial recall in its Quaker Foods North America branch (oatmeal). These challenges have adversely affected organic sales, prompting PepsiCo to lower its full-year forecast. They now expect core constant-currency EPS to remain flat year-over-year, a notable drop from the earlier anticipated mid-single-digit increase, and foresee only low single-digit growth in organic revenue. This cautious outlook has understandably shaken investor confidence. In spite of these recent difficulties, our analysis indicates that PepsiCo offers a more attractive investment opportunity than Coca-Cola over the coming years. This belief is rooted in a thorough assessment of historical revenue trends, investment returns, and comparative valuation metrics. The subsequent sections will elaborate on the rationale behind this viewpoint. That said, if you're seeking a potential upside with a more stable experience than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, delivering >91% returns since its launch. Separately, see – SOFI Stock To $30? How Are Coca-Cola and PepsiCo's Sales Trending? Coca-Cola has achieved a 7% average annual revenue growth from 2021 to 2024, rising from $38.7 billion to $47.1 billion. This slightly exceeds PepsiCo's 5% average annual growth, which saw its revenue increase from $79.5 billion to $91.9 billion during the same timeframe. Coca-Cola's revenue growth is driven by strong performance in both its at-home and away-from-home channels. This growth is largely fueled by effective pricing strategies that have enabled the company to handle inflationary pressures. Regionally, North America and Latin America have been the main contributors to this growth, reflecting a strong demand for Coca-Cola's diverse beverage range. PepsiCo's revenue growth from 2021 to 2024 was propelled by strategic pricing moves and robust performance in its beverage and snack sectors, although growth encountered significant challenges due to operational difficulties. The company benefitted from heightened interest in zero-sugar varieties of Pepsi, and it retained market share advancements in Gatorade. However, PepsiCo's growth path was heavily impacted by the Quaker Oats recall issue, which commenced in late 2023 due to salmonella contamination. The recall was triggered by salmonella that persisted at a PepsiCo facility for up to four years, ultimately resulting in the permanent closure of the Illinois Quaker Oats factory. Despite these obstacles, PepsiCo achieved annual revenue growth, showcasing the strength of its core beverage and Frito-Lay divisions in counterbalancing the notable decline in the Quaker sector. What About Profitability? From 2021 to 2024, Coca-Cola experienced a slight decline in its net margin, decreasing from 25.3% to 22.6%. This is associated with rising mixed costs, product mix, and increased marketing expenses. See – Coca-Cola's Net Margin Comparison – for further details. On the other hand, PepsiCo's net margin increased from 9.6% to 10.4%. While the increase was modest, PepsiCo benefitted from productivity initiatives and effective pricing for its products. Financial Risk Analysis In assessing financial risk, Coca-Cola performs slightly better than PepsiCo. Coca-Cola's debt-to-equity ratio of 16% is more advantageous than PepsiCo's 27%. Moreover, its cash-to-assets ratio of 14% surpasses PepsiCo's 8%. In essence, Coca-Cola showcases a stronger debt profile while maintaining a more stable cash position. KO and PEP: Comparing 4-Year Stock Returns Against the S&P 500 Since early January 2021, Coca-Cola's stock has experienced solid growth, rising approximately 40% from around $50 to its current price of about $70. In contrast, PepsiCo's stock has shown minimal movement, creeping up only about 4% from $130 to $135 during the same timeframe. This underperformance by both beverage giants is particularly noticeable when juxtaposed with the S&P 500, which has surged by roughly 65% since the beginning of 2021. However, a detailed examination of the annual returns paints a more intricate picture of volatility for both KO and PEP: When compared to the S&P 500's performance (27% in 2021, -19% in 2022, 24% in 2023, and 23% in 2024), it's evident that both Coca-Cola and PepsiCo underperformed relative to the broader market in 2021, 2023, and 2024. While KO has shown more consistent positive returns throughout the entire period, PEP's recent challenges have affected its overall long-term performance. PEP Stock: The Superior Beverage Investment Choice? We contend that PepsiCo (PEP) currently provides a more appealing investment opportunity than Coca-Cola (KO), largely due to its advantageous valuation. PEP stock trades at merely 17 times its trailing adjusted earnings of $8.03 per share. This is significantly lower than its four-year average price-to-earnings (P/E) ratio of 22 times, indicating it is undervalued relative to its historical performance. Conversely, KO stock is trading at 25 times its trailing adjusted earnings of $2.89 per share. This valuation is above its own four-year average P/E of 22 times. Although PepsiCo has faced recent challenges, particularly due to the Quaker issue affecting North American sales, we expect a recovery in this area in the upcoming quarters. Although PepsiCo's revenues are anticipated to remain flat this year, we predict they will return to mid-single-digit growth starting next year. This expected rebound, alongside its current discounted valuation, positions PepsiCo favorably compared to the two beverage giants. For investors aiming to reduce the inherent volatility linked to individual stocks like KO and PEP, alternate investment strategies are accessible. The Trefis RV strategy, celebrated for its track record of outperforming its all-cap stock benchmark, provides a diversified route to potentially secure robust returns. Likewise, the High Quality portfolio has shown superior performance compared to the S&P 500, yielding returns in excess of 91% since its inception, thus providing potential upside with reduced stock-specific risk.
Forbes
30 minutes ago
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How Retirees Can Stay Calm When Markets Get Volatile
Volatile stock markets can be an especially stressing time for retirees. If You Can't Handle The Heat, Revisit Your Strategy The classic phrase, 'If you can't handle the heat, get out of the kitchen,' might be great for sports banter, but it also applies to investing—especially for retirees. Market swings are part of the deal, and if volatility causes sleepless nights, it might be time to reconsider your approach. Short-Term Noise Vs. Long-Term Goals This year's market performance offers a useful case study. The year began with strong gains, only to be disrupted by geopolitical concerns and tariff talk in February and March. A sharp pullback followed, triggering anxiety among some investors. But by May, markets rebounded and turned positive once again. All of this unfolded in under five months. It's a reminder that markets can move fast—and unpredictably. For those in or near retirement, reacting emotionally to short-term dips can be more damaging than the downturns themselves. Why Staying The Course Matters A solid retirement investment strategy isn't built on gut reactions. It's based on a long-term plan that accounts for inevitable market corrections. Adjusting a portfolio impulsively after a decline is not a sound investment philosophy—it's market timing, and history shows that rarely works. For retirees, the key is consistency. Those who stick with a diversified, well-allocated strategy tend to fare better over time than those who try to outguess market movements. The Market Is Volatile—That's The Point Tough love time: if a brief market correction causes you to panic, that's a signal—not about the markets, but about your portfolio's alignment with your risk tolerance. Retirement is not the time for emotional investing. Instead, use volatility as an opportunity to review your allocation. Are you too exposed to risk? Are your income needs secure regardless of market conditions? These are the questions worth asking. Bet On Market History, Not Headlines Here's a fact worth remembering: U.S. markets have historically returned 8-10% annually. But that doesn't mean they'll give you a smooth 8-10% every year. Some years will be great, others frustrating. That's the nature of averages. Just like a Hall of Fame baseball player fails more than they succeed at bat, smart investors know losses are part of the process. A down year—or even two—doesn't invalidate the long-term value of staying invested. Control What You Can The only predictable thing about markets is their unpredictability. Trying to control them is a losing game. Instead, focus on what you can control: your spending, saving, and staying aligned with your financial plan. For retirees, success isn't about avoiding every market drop. It's about having a plan built to withstand them—so when volatility hits, you can ride it out without derailing your retirement goals. Final Thoughts No one knows exactly what the future holds. But wise investors, especially those in retirement, stay committed to their plan through all seasons. The strategy shouldn't change just because the market does. Staying invested, staying calm, and staying focused on the long-term—that's the real key to retirement peace of mind.
