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Globe and Mail
3 days ago
- Business
- Globe and Mail
Coca-Cola vs. PepsiCo: Which Soft Drinks Behemoth Stays on Top?
When it comes to global beverage supremacy, the competition between The Coca-Cola Company KO and PepsiCo Inc. PEP is both iconic and enduring. These two titans have long dominated the soft drink space, shaping consumer tastes and marketing trends for more than a century. Coca-Cola is often synonymous with classic carbonated cola and boasts the world's most recognized beverage brand, whereas PepsiCo counters with a diversified empire that stretches far beyond soda, encompassing snacks, juices and ready-to-drink teas. At the heart of this rivalry lies a battle for market share, brand dominance and strategic edge. Coca-Cola is focused on its beverage-only strategy to drive global reach and scale. Meanwhile, PepsiCo plays a broader game, leveraging its vast portfolio of food and beverage brands to capture share across consumption occasions. As the industry shifts toward health-conscious choices and evolving consumer preferences, the question remains: Which of these beverage behemoths is better positioned to stay on top? Let us dive into the numbers, strategies and positioning that define this classic corporate showdown. The Case for KO Coca-Cola stands tall as a global beverage powerhouse, commanding a leading share in the soft drinks industry through its focused beverage business model. The company dominates the global non-alcoholic beverage market with $30-billion brands and industry-leading value share gains for 17 consecutive quarters. Its expansive portfolio spans carbonated drinks, juices, teas, dairy and sports beverages, anchored by powerhouse brands like Coca-Cola Zero Sugar, Sprite and fairlife. Coca-Cola's strength lies in its ability to drive consistent brand relevance across diverse markets, from affordable multi-serve packs in Latin America to premium mini-cans in Europe, while steadily gaining value share quarter after quarter. Strategically, KO is focused on affordability, digital engagement and premium innovation. Coca-Cola continues to sharpen its edge through bold marketing, local customization, and digital innovation. Campaigns like 'Share a Coke' and 'Bring the Juice' tap into cultural moments, while AI-led pricing tools and connected packaging boost engagement and efficiency. Its growing digital platforms are connecting directly with millions of retailers, especially in fast-moving markets like India. The company's marketing transformation not only boosts reach but also yields measurable productivity gains. In the second quarter of 2025, Coca-Cola expanded margins by up to 190 basis points, thanks to disciplined execution, operating leverage and cost efficiencies. The company also adapts swiftly to shifts in consumer behavior and market volatility, whether it is geopolitical disruption, erratic weather or evolving preferences. Rather than be derailed by global trade headwinds or currency fluctuations, Coca-Cola leverages local sourcing and strategic hedging to maintain momentum. Backed by strong execution, smart reinvestment and a resilient system, the company continues to reinforce its leadership in the ever-evolving global beverage landscape. The Case for PEP PepsiCo's investment case is underpinned by its unmatched scale, diversified portfolio, and strong foothold across beverages and snacks. In the soft drinks arena, PepsiCo continues to gain market share, especially through the growing momentum of Pepsi Zero Sugar and popular variants like Wild Cherry and Baja Blast. Its beverage business complements a dominant snack portfolio, anchored by household names like Lay's, Doritos, and Sun Chips. With both beverage and food brands commanding loyalty across demographics and consumption occasions, PepsiCo positions itself as a one-stop refreshment powerhouse. The company's share of the global soft drinks market is substantial, but its broader consumer packaged goods portfolio extends its moat beyond traditional rivals. Strategically, PepsiCo is driving forward with a multipronged approach: refining its price-pack architecture, expanding into functional beverages and better-for-you snacks, and deepening its presence in international markets. Recent acquisitions like prebiotic soda brand Poppi illustrate how PepsiCo is capturing Gen Z attention while innovating around wellness trends. Meanwhile, large-scale digital initiatives, ranging from AI-driven demand forecasting to trade promotion optimization, are sharpening execution and boosting agility. The 'One North America' initiative integrates its food and beverage operations, unlocking synergies and enabling smarter, streamlined investments into growth and marketing. Despite global tariff pressures and inflation-driven supply-chain challenges, PepsiCo is navigating headwinds through strategic sourcing adjustments, localized manufacturing and pricing precision. Its proactive cost-control measures and productivity programs — from automation to footprint optimization — are freeing up capital for reinvestment while protecting margins. Backed by robust brand equity, operational resilience and a future-facing innovation pipeline, PepsiCo remains a compelling long-term bet in the global consumer staples space. Price Performance & Valuation of KO & PEP Shares of PepsiCo have moved higher in the past three months, buoyed by strong second-quarter 2025 results and an encouraging earnings outlook. The company witnessed accelerated net revenue growth compared with the previous quarter, underscoring its ability to perform amid a complex operating environment. International momentum remained a key strength, while North America showed signs of recovery through sharper execution and improved competitiveness across major subcategories and channels. In contrast, Coca-Cola's stock has slipped in the same period despite a solid second-quarter performance and steady global execution. The divergence highlights shifting investor sentiment, with growing optimism around PepsiCo's operational turnaround and margin-improvement efforts. In the past three months, PEP shares have rallied 8%, while the KO stock has declined 3.8%. From a valuation standpoint, PEP currently trades at a lower forward price-to-earnings (P/E) multiple of 17.66X compared with Coca-Cola's 22.26X, making it more attractively priced, driven by its earnings and diversified revenue stream. The PEP stock looks cheap from a valuation perspective. Moreover, its diversity, pricing power and innovation engine make it a compelling long-term holding, especially for those seeking both growth and downside protection. Coca-Cola does seem pricey. However, its valuations reflect its strong brand equity, disciplined capital strategy and exposure to high-growth regions, making it a resilient pick for long-term portfolios. If the company sustains its execution, the premium could be warranted. How Does Zacks Consensus Estimate Compare for PEP & KO? PepsiCo's EPS estimates for 2025 and 2026 moved up 1.7% and 1.6%, respectively, in the last seven days. PEP's 2025 revenues are projected to increase 1.2% year over year to $92.9 billion, while EPS is expected to decline 2% year over year to $8.00. Coca-Cola's EPS estimates for 2025 have been unchanged in the past 30 days, while the consensus estimate for 2026 has moved up by a penny in the past seven days. KO's 2025 revenues and EPS are expected to increase 4.2% and 3.1% year over year, respectively, to $49 billion and $2.97 per share. PEP vs. KO: Who Has the Edge? In the latest round of this classic rivalry, PepsiCo edges ahead of Coca-Cola on multiple fronts. A solid three-month stock performance, fueled by a robust second-quarter and improved earnings outlook, signals renewed investor confidence. PepsiCo's ability to execute a strategic turnaround, particularly in its North America operations, while maintaining international momentum, has boosted its market standing. Add to that a more attractive valuation and a diversified portfolio that goes beyond beverages, and PepsiCo presents a stronger investment case at this juncture. Further bolstering the bullish outlook is the upward revision in PepsiCo's earnings estimates, reflecting optimism around its future profitability. The company's innovation in both product development and digital strategy, coupled with its disciplined cost control and synergy-driven 'One North America' initiative, suggests that it is well-equipped to capture long-term growth. While Coca-Cola remains a stalwart with global brand power, PepsiCo's recent traction and growth potential give it the upper hand in this face-off. PEP currently carries a Zacks Rank #2 (Buy) and KO has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. #1 Semiconductor Stock to Buy (Not NVDA) The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow. One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report
Yahoo
17-07-2025
- Business
- Yahoo
PepsiCo: Q2 Earnings Snapshot
PURCHASE, N.Y. (AP) — PURCHASE, N.Y. (AP) — PepsiCo Inc. (PEP) on Thursday reported second-quarter net income of $1.26 billion. The Purchase, New York-based company said it had profit of 92 cents per share. Earnings, adjusted for one-time gains and costs, were $2.12 per share. The results surpassed Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $2.03 per share. The food and beverage company posted revenue of $22.73 billion in the period, which also topped Street forecasts. Seven analysts surveyed by Zacks expected $22.39 billion. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on PEP at Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Globe and Mail
08-07-2025
- Business
- Globe and Mail
How is PepsiCo Balancing Volume Declines With Pricing Gains?
PepsiCo, Inc. PEP is navigating volume softness through a carefully orchestrated mix of strategic pricing, targeted value investments and product innovation. Facing a pressured consumer environment, particularly in its Frito-Lay North America ("FLNA") segment, the company has introduced a nuanced "dual-size" price-pack architecture. This includes lower entry price points (under $2) aimed at value-conscious shoppers and higher-value offerings for premium consumers. PEP is witnessing meaningful improvements in unit volumes where these strategies have been rolled out, especially in single-serve and multi-pack formats attached to meal deals, which are showing traction in convenience channels. Simultaneously, PepsiCo is pursuing intelligent reinvestment strategies that balance affordability with profitability. Rather than indiscriminately slashing prices, management is leveraging data and advanced tools to optimize promotions and product sizes according to income cohorts and time-of-month spending behaviors. Smaller packs and value-priced options are being prioritized to maintain consumer frequency, while operational efficiencies, such as improved field execution, SAP-driven visibility and cost-rightsizing, are being accelerated to free up funds for reinvestment. PepsiCo's broader strategy also includes portfolio transformation and expansion into high-growth segments, especially internationally. While FLNA has seen subdued volume trends, international markets have shown resilience, helping to offset domestic pressure. The company expects mid- to high-single-digit growth from markets like India and Brazil, with incremental profitability and scale. This two-pronged approach is mitigating volume losses with pricing and strategic reinvestment. Meanwhile, leaning on international momentum positions PepsiCo to preserve margins and drive long-term sustainable growth despite near-term headwinds. PEP's Competitors: KO & MDLZ's Smart Moves The Coca-Cola Company KO and Mondelez International, Inc. MDLZ are the key beverage companies competing with PepsiCo in the global arena. As PepsiCo's primary global rival in the beverage sector, Coca-Cola competes directly across carbonated soft drinks, bottled water, juices and ready-to-drink teas. While PepsiCo has a robust food and snack division (Frito-Lay), Coca-Cola's strength lies in its beverage-focused portfolio and dominant global brand recognition, particularly in the cola category. In the snack and convenience foods space, Mondelez is a major competitor to PepsiCo's Frito-Lay segment. Mondelez owns popular global brands like Oreo, Ritz and Cadbury, and competes in categories such as biscuits, crackers and chocolate. Both companies vie for market share in snacking occasions and are focused on innovation, affordability and international expansion. PEP's Price Performance, Valuation & Estimates Shares of PepsiCo have lost 11.6% year to date against the industry 's growth of 7%. From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 17.09X, below the industry's average of 18.47X. The Zacks Consensus Estimate for PEP's 2025 earnings implies a year-over-year decline of 3.6%, whereas its 2026 earnings estimate suggests a year-over-year uptick of 5.3%. The estimates for 2025 and 2026 have been unchanged in the past seven days. Image Source: Zacks Investment Research PEP currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Picks Stock Most Likely to "At Least Double" Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren't winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%. See Our Top Stock to Double (Plus 4 Runners Up) >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Mondelez International, Inc. (MDLZ): Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
24-06-2025
- Business
- Globe and Mail
2 Magnificent S&P 500 Dividend Stocks Down 34% to 64% to Buy and Hold Forever
Any company that sticks around long enough is going to go through some challenges at some point. For example, consider well-known retailer Target Corporation (NYSE: TGT), down 64%, and food and beverage giant PepsiCo (NASDAQ: PEP), down 34%. These legendary companies are both working through issues that have shaken Wall Street's confidence in them, and sent their share prices sliding. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » While it's no certainty that they'll figure things out -- since past results don't guarantee future success -- there are certainly reasons for both companies to be optimistic. After all, you don't string together decades of uninterrupted dividend increases by accident. Here's why investors may want to buy these two Dividend Kings at their current bargain-level prices, and hold on to them forever. Target is dealing with temporary headwinds that should fade over time People tend to emphasize their most recent experiences, so it becomes easy to forget just how much the world changes over the span of decades. Target has been one of America's prominent retailers for generations -- so long, in fact, that the company has paid and raised its dividend for 53 consecutive years. That means Target has endured recessions, political cycles, you name it. Yet, it continues to march on. Admittedly, Target is working through some issues right now. The company's sales have declined over the past few years, due to a combination of things: American shoppers are struggling amid continued inflation following the pandemic and high interest rates. Tariff uncertainty is weighing on consumer sentiment. There's fallout from its decision to dial back several diversity, equity, and inclusion (DEI) initiatives earlier this year. Target specializes in unique store branding and merchandise partnerships. Food, beverages, and household essentials only accounted for 40% of total merchandise sales last year. Therefore, as people cut back on things they may want in favor of things they need, Target will feel that pain. Fortunately, the economy has always been cyclical, and there's a good chance that consumer spending will bounce back over time. Additionally, Target recently announced a new Enterprise Acceleration Office, which is essentially a management shakeup to try to execute ideas faster and more effectively. Only time will tell if that works, but trying different things is a positive when the business is struggling. There is more good news. Target is adding approximately 300 new stores over the next decade. If the company can get sales growing again and avoid any more publicity missteps, the stock could do very well from its lowly price-to-earnings (P/E) ratio of only 10.5 today. In the meantime, investors get a 4.7% dividend yield, an all-time high for Target stock, backed by a strong 60% dividend payout ratio and an investment-grade balance sheet. PepsiCo is adjusting to a new business landscape Fellow Dividend King PepsiCo is also struggling at the moment. There's no doubt that tighter consumer finances have weighed on shoppers, pushing some people to trade down from PepsiCo's brands to less expensive store brand products. On top of that, weight loss drugs have become arguably the hottest growth trend in healthcare. These drugs help people lose weight by essentially slowing digestion and suppressing their appetites. It's pretty obvious why that would be bad for PepsiCo's business. But is the business dying? That's probably a stretch. PepsiCo is one of the world's largest food and beverage companies, with a remarkably diverse stable of brands, including Pepsi, Mountain Dew, Gatorade, Frito Lay, Doritos, and Quaker. It's fair to question whether PepsiCo will grow as quickly as it did a decade ago, but this company should remain fairly resilient. PepsiCo's dividend payout ratio is still manageable at 72%, and the company's investment-grade balance sheet is a financial security blanket. So, what should investors look for? As with Target, healthier consumer spending would bode well for PepsiCo's business. On the weight loss drug front, give PepsiCo some credit. Management has already acquired some healthier food and beverage brands, and innovations such as zero-sugar sodas have become increasingly popular. The company will continue to look for ways to get people to buy products, with or without weight loss drugs. PepsiCo's dividend yield has never been this high. It's currently 4.25%. That's a solid floor for investors, who only need 5% to 6% long-term earnings growth to produce double-digit annualized total returns. The uncertainty has affected the stock, though. Shares are down to a P/E ratio of 19, notably below their 10-year average of 26. Investors should do fairly well at a minimum from here, if PepsiCo can simply muster respectable growth moving forward. Should you invest $1,000 in Target right now? Before you buy stock in Target, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Target wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. 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Yahoo
14-06-2025
- Business
- Yahoo
UBS Sees PEP as a Buy-Worthy Defensive Play
PepsiCo Inc. (NASDAQ:PEP) is one of the best stocks for a retirement stock portfolio. The stock made it to UBS's list as a strong defensive investment. Its shares have dropped nearly 15% so far in 2025, but the stock offers a dividend yield of 4.4%. A close up of a glass of a refreshing carbonated beverage illustrating the company's different beverages. While most analysts rate PepsiCo Inc. (NASDAQ:PEP) as a Hold, the average price targets suggest nearly 15% potential upside from its current trading level, according to LSEG data. In May, PepsiCo Inc. (NASDAQ:PEP) increased its quarterly dividend by 5% to $1.4225 per share compared to the previous year. The company has consistently paid dividends since 1965 and celebrated its 53rd straight annual dividend increase this year. Recently, PepsiCo Inc. (NASDAQ:PEP) has been expanding its portfolio, completing the $1.95 billion acquisition of probiotic soda brand Poppi last month, which includes $300 million in expected cash tax benefits. PepsiCo Inc. (NASDAQ:PEP) is a leading global company in the food and beverage industry, involved in the production, marketing, and distribution of a broad variety of products. It is widely recognized for popular brands such as Pepsi, Lay's, Doritos, Gatorade, and Quaker. The company's operations span both the beverage and food sectors, with a presence in more than 200 countries and territories around the world. While we acknowledge the potential of PEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure. None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
