Comprehensive Stock Comparison
Compare PepsiCo, Inc. (PEP) vs The Coca-Cola Company (KO) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | PEP | 2.3% revenue growth vs KO's 1.9% |
| Value | PEP | Lower P/E (19.7x vs 25.3x) |
| Quality / Margins | KO | 27.3% net margin vs PEP's 8.8% |
| Stability / Safety | KO | Beta 0.04 vs PEP's 0.14, lower leverage |
| Dividends | PEP | 3.3% yield, 25-year raise streak, vs KO's 2.5% |
| Momentum (1Y) | KO | +17.4% vs PEP's +14.3% |
| Efficiency (ROA) | KO | 12.5% ROA vs PEP's 7.7%, ROIC 15.8% vs 14.9% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
PepsiCo is a global food and beverage giant that sells iconic snack brands like Lay's and Doritos alongside its namesake soft drinks. It generates revenue primarily through its Frito-Lay North America snacks division (~50% of operating profit) and its beverage business, with the rest coming from international markets and Quaker Foods. The company's competitive moat lies in its massive scale, powerful distribution network, and portfolio of deeply entrenched household brands that command strong consumer loyalty.
Coca-Cola is a global beverage company that manufactures and sells non-alcoholic drinks worldwide. It generates revenue primarily through concentrate sales to bottling partners (~40% of revenue) and finished product sales (~60%), with sparkling soft drinks like Coca-Cola, Sprite, and Fanta representing the majority of sales. Its key competitive advantage is an unparalleled global distribution network and one of the world's most valuable brand portfolios, creating massive economies of scale and pricing power.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Segment breakdown not available.
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
KO leads in 4 of 6 categories (Financial Metrics, Profitability & Efficiency). PEP leads in 1 (Valuation Metrics). 1 tied.
Financial Metrics (TTM)
PEP is the larger business by revenue, generating $93.9B annually — 2.0x KO's $47.9B. KO is the more profitable business, keeping 27.3% of every revenue dollar as net income compared to PEP's 8.8%. On growth, PEP holds the edge at +5.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | PEPPepsiCo, Inc. | KOThe Coca-Cola Com… |
|---|---|---|
| RevenueTrailing 12 months | $93.9B | $47.9B |
| EBITDAEarnings before interest/tax | $14.3B | $16.1B |
| Net IncomeAfter-tax profit | $8.2B | $13.1B |
| Free Cash FlowCash after capex | $7.7B | $5.3B |
| Gross MarginGross profit ÷ Revenue | +54.1% | +61.6% |
| Operating MarginEBIT ÷ Revenue | +12.2% | +28.7% |
| Net MarginNet income ÷ Revenue | +8.8% | +27.3% |
| FCF MarginFCF ÷ Revenue | +8.2% | +11.0% |
| Rev. Growth (YoY)Latest quarter vs prior year | +5.6% | +2.4% |
| EPS Growth (YoY)Latest quarter vs prior year | +66.7% | +3.9% |
Valuation Metrics
At 26.8x trailing earnings, KO trades at a 5% valuation discount to PEP's 28.3x P/E. Adjusting for growth (PEG ratio), KO offers better value at 2.40x vs PEP's 8.67x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | PEPPepsiCo, Inc. | KOThe Coca-Cola Com… |
|---|---|---|
| Market CapShares × price | $232.0B | $350.8B |
| Enterprise ValueMkt cap + debt − cash | $272.7B | $386.1B |
| Trailing P/EPrice ÷ TTM EPS | 28.29x | 26.83x |
| Forward P/EPrice ÷ next-FY EPS est. | 19.68x | 25.26x |
| PEG RatioP/E ÷ EPS growth rate | 8.67x | 2.40x |
| EV / EBITDAEnterprise value multiple | 19.07x | 26.06x |
| Price / SalesMarket cap ÷ Revenue | 2.47x | 7.32x |
| Price / BookPrice ÷ Book value/share | 11.33x | 10.26x |
| Price / FCFMarket cap ÷ FCF | 30.24x | 66.25x |
Profitability & Efficiency
PEP delivers a 40.1% return on equity — every $100 of shareholder capital generates $40 in annual profit, vs $38 for KO. KO carries lower financial leverage with a 1.33x debt-to-equity ratio, signaling a more conservative balance sheet compared to PEP's 2.43x. On the Piotroski fundamental quality scale (0–9), KO scores 7/9 vs PEP's 5/9, reflecting strong financial health.
| Metric | PEPPepsiCo, Inc. | KOThe Coca-Cola Com… |
|---|---|---|
| ROE (TTM)Return on equity | +40.1% | +38.2% |
| ROA (TTM)Return on assets | +7.7% | +12.5% |
| ROICReturn on invested capital | +14.9% | +15.8% |
| ROCEReturn on capital employed | +16.1% | +17.3% |
| Piotroski ScoreFundamental quality 0–9 | 5 | 7 |
| Debt / EquityFinancial leverage | 2.43x | 1.33x |
| Net DebtTotal debt minus cash | $40.7B | $35.2B |
| Cash & Equiv.Liquid assets | $9.2B | $10.3B |
| Total DebtShort + long-term debt | $49.9B | $45.5B |
| Interest CoverageEBIT ÷ Interest expense | 10.34x | 10.67x |
Total Returns (with DRIP)
A $10,000 investment in KO five years ago would be worth $18,200 today (with dividends reinvested), compared to $14,884 for PEP. Over the past 12 months, KO leads with a +17.4% total return vs PEP's +14.3%. The 3-year compound annual growth rate (CAGR) favors KO at 13.7% vs PEP's 2.3% — a key indicator of consistent wealth creation.
| Metric | PEPPepsiCo, Inc. | KOThe Coca-Cola Com… |
|---|---|---|
| YTD ReturnYear-to-date | +19.3% | +18.0% |
| 1-Year ReturnPast 12 months | +14.3% | +17.4% |
| 3-Year ReturnCumulative with dividends | +7.0% | +46.8% |
| 5-Year ReturnCumulative with dividends | +48.8% | +82.0% |
| 10-Year ReturnCumulative with dividends | +116.7% | +128.4% |
| CAGR (3Y)Annualised 3-year return | +2.3% | +13.7% |
Risk & Volatility
KO is the less volatile stock with a 0.04 beta — it tends to amplify market swings less than PEP's 0.14 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | PEPPepsiCo, Inc. | KOThe Coca-Cola Com… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.14x | 0.04x |
| 52-Week HighHighest price in past year | $171.48 | $81.69 |
| 52-Week LowLowest price in past year | $127.60 | $65.35 |
| % of 52W HighCurrent price vs 52-week peak | +99.0% | +99.8% |
| RSI (14)Momentum oscillator 0–100 | 65.3 | 71.2 |
| Avg Volume (50D)Average daily shares traded | 7.3M | 14.9M |
Analyst Outlook
Wall Street rates PEP as "Hold" and KO as "Buy". Consensus price targets imply 3.9% upside for KO (target: $85) vs -1.2% for PEP (target: $168). For income investors, PEP offers the higher dividend yield at 3.28% vs KO's 2.50%.
| Metric | PEPPepsiCo, Inc. | KOThe Coca-Cola Com… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Hold | Buy |
| Price TargetConsensus 12-month target | $167.75 | $84.75 |
| # AnalystsCovering analysts | 44 | 47 |
| Dividend YieldAnnual dividend ÷ price | +3.3% | +2.5% |
| Dividend StreakConsecutive years of raises | 25 | 35 |
| Dividend / ShareAnnual DPS | $5.57 | $2.04 |
| Buyback YieldShare repurchases ÷ mkt cap | +0.4% | +0.2% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| PepsiCo, Inc. (PEP) | 100 | 112.81 | +12.8% |
| The Coca-Cola Compa… (KO) | 100 | 134.71 | +34.7% |
The Coca-Cola Compa… (KO) returned +82% over 5 years vs PepsiCo, Inc. (PEP)'s +49%. A $10,000 investment in KO 5 years ago would be worth $18,200 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| PepsiCo, Inc. (PEP) | $62.8B | $93.9B | +49.6% |
| The Coca-Cola Compa… (KO) | $41.9B | $47.9B | +14.5% |
PepsiCo, Inc.'s revenue grew from $62.8B (2016) to $93.9B (2025) — a 4.6% CAGR. The Coca-Cola Company's revenue grew from $41.9B (2016) to $47.9B (2025) — a 1.5% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| PepsiCo, Inc. (PEP) | 10.1% | 8.8% | -13.0% |
| The Coca-Cola Compa… (KO) | 15.6% | 27.3% | +75.4% |
PepsiCo, Inc.'s net margin went from 10% (2016) to 9% (2025). The Coca-Cola Company's net margin went from 16% (2016) to 27% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| PepsiCo, Inc. (PEP) | 35.5 | 23.9 | -32.7% |
| The Coca-Cola Compa… (KO) | 158.2 | 23 | -85.5% |
PepsiCo, Inc. has traded in a 13x–36x P/E range over 9 years; current trailing P/E is ~28x. The Coca-Cola Company has traded in a 23x–158x P/E range over 9 years; current trailing P/E is ~27x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| PepsiCo, Inc. (PEP) | 4.36 | 6 | +37.6% |
| The Coca-Cola Compa… (KO) | 1.49 | 3.04 | +104.0% |
PepsiCo, Inc.'s EPS grew from $4.36 (2016) to $6.00 (2025) — a 4% CAGR. The Coca-Cola Company's EPS grew from $1.49 (2016) to $3.04 (2025) — a 8% CAGR.
Chart 6Free Cash Flow — 5 Years
PepsiCo, Inc. generated $8B FCF in 2025 (+10% vs 2021). The Coca-Cola Company generated $5B FCF in 2025 (-53% vs 2021).
PEP vs KO: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is PEP or KO a better buy right now?
The Coca-Cola Company (KO) offers the better valuation at 26.8x trailing P/E (25.3x forward), making it the more compelling value choice. Analysts rate The Coca-Cola Company (KO) a "Buy" — based on 47 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — PEP or KO?
On trailing P/E, The Coca-Cola Company (KO) is the cheapest at 26.8x versus PepsiCo, Inc. at 28.3x. On forward P/E, PepsiCo, Inc. is actually cheaper at 19.7x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: The Coca-Cola Company wins at 2.26x versus PepsiCo, Inc.'s 6.03x.
03Which is the better long-term investment — PEP or KO?
Over the past 5 years, The Coca-Cola Company (KO) delivered a total return of +82.0%, compared to +48.8% for PepsiCo, Inc. (PEP). A $10,000 investment in KO five years ago would be worth approximately $18K today (assuming dividends reinvested). Over 10 years, the gap is even starker: KO returned +128.4% versus PEP's +116.7%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — PEP or KO?
By beta (market sensitivity over 5 years), The Coca-Cola Company (KO) is the lower-risk stock at 0.04β versus PepsiCo, Inc.'s 0.14β — meaning PEP is approximately 219% more volatile than KO relative to the S&P 500. On balance sheet safety, The Coca-Cola Company (KO) carries a lower debt/equity ratio of 133% versus 2% for PepsiCo, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — PEP or KO?
The Coca-Cola Company (KO) is the more profitable company, earning 27.3% net margin versus 8.8% for PepsiCo, Inc. — meaning it keeps 27.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: KO leads at 28.7% versus 12.2% for PEP. At the gross margin level — before operating expenses — KO leads at 61.6%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is PEP or KO more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, The Coca-Cola Company (KO) is the more undervalued stock at a PEG of 2.26x versus PepsiCo, Inc.'s 6.03x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, PepsiCo, Inc. (PEP) trades at 19.7x forward P/E versus 25.3x for The Coca-Cola Company — 5.6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for KO: 3.9% to $84.75.
07Which pays a better dividend — PEP or KO?
All stocks in this comparison pay dividends. PepsiCo, Inc. (PEP) offers the highest yield at 3.3%, versus 2.5% for The Coca-Cola Company (KO).
08Is PEP or KO better for a retirement portfolio?
For long-horizon retirement investors, The Coca-Cola Company (KO) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.04), 2.5% yield, +128.4% 10Y return). Both have compounded well over 10 years (KO: +128.4%, PEP: +116.7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between PEP and KO?
Both stocks operate in the Consumer Defensive sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. In terms of investment character: PEP is a large-cap income-oriented stock; KO is a large-cap quality compounder stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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