Daily Management Review

Coca-Cola vs Pepsi: Investor’s choice


04/23/2019


The confrontation between Coca-Cola and Pepsi is one of the most popular mass culture examples in the modern history.



Sean Loyless
Sean Loyless
Both companies have been involved in intense competition since the 1970s, when the term "Cola war" appeared. At about the same time, Pepsi came up with the Pepsi Taste Challenge, where marketers asked people in blind tastings to determine which brand they preferred to drink.

For years both Coca-Cola and Pepsi have been creating the thirst-quenching fizzy that consumers love so much. 

Coca-Cola

Coca-Cola conducted its initial public offering (IPO) in 1919 with the help of the underwriter Trust Company of Georgia, which is now known as SunTrust Banks. As history shows, , a company usually acquires beverage manufacturers for expansion purposes, for example Costa Coffee, Minute Maid and Honest Tea.

At first, Coca-Cola shares were traded under the ticker CCO, but in 1923 the company decided to replace it with KO, and so it remains now.

It is not surprising that the world's largest beverage company offers its shareholders consistently high dividend payments and is part of the so-called exclusive group known as “dividend aristocrats”. To qualify to be in this group, a company must meet several stringent requirements, for example, be part of the S&P 500 and raise dividends for at least 25 years in a row. Coca-Cola increased payments for the first time in 1963 and continued to do so up to this day.

In the middle of last year, the company announced another increase in dividend payments, having done so for the 55th consecutive time. Not surprisingly, the manufacturer is included in the list of "aristocrats."

The quarterly dividend declared by Coca-Cola in February 2019 was 40 cents per share. The company's dividend yield is currently about 3.41%, which is almost twice the average yield for the consumer goods sector.

Coca-Cola shareholders receive payments in April, July, October and December.

In the fourth quarter of 2018, the company reported net income of $ 870 million, or 20 cents per share, and the company's revenue reached $ 7.06 billion.

On April 18, 2019, Coca-Cola shares rose 20 cents to close at $ 47.48 per share. The company began 2019 with a mark of $ 46.93 per share. As of April 18, 2019, the firm’s market capitalization was estimated at $ 203 billion.

Pepsi

Pepsi, one of the main competitors of Coca-Cola, is also included in the group of dividend aristocrats who are loved by all investors.

Despite the fact that the company’s name is not as frequent in the media as the name of its competitor, the Pepsi story is no less colorful. Invented in 1893 by a pharmacist from North Carolina, the drink was originally called Brad's Drink. The current name was approved in 1898. As you know, it is a reference to the word "dyspepsia", a common disorder of the digestive tract, which Pepsi soda claimed to be able to cure.

In addition to its core business, Pepsi also produces snacks and other soft drinks. Over the years, the company has acquired brands such as Frito-Lay, Gatorade, Quaker and Tropicana.

On February 13, 2019, Pepsi announced an increase in quarterly payments to 0.9275 cents per share, which is 15.2% more than last year. At the moment, Pepsi's dividend yield is approximately 3.03%. The company pays a stable dividend every quarter since 1965.

Net income for the fourth quarter of 2018 was $ 6.85 billion, or $ 4.83 per share, and revenue rose to $ 19.52 billion. Pepsi pays dividends in January, March, June and September.

On April 18, 2019, the company's shares rose by 0.06% to close at $ 127.09 per share. 2019, the company began with a mark of $ 109.28 per share. As of April 18, 2019, Pepsi's market capitalization was estimated at $ 178.1 billion.

source: bloomberg.com, ft.com






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