PepsiCo is a better buy than Coca-Cola on higher earnings and faster growth

on Jun 22, 2022
  • PepsiCo and Coca-Cola are both attractive for the bear market.
  • PepsiCo reflects better performance than Coca-Cola both fundamentally and technically.
  • The analysis recommends buying and holding PepsiCo.

PepsiCo Inc (NASDAQ:PEP) and The Coca-Cola Company (NYSE:KO) are attractive for the bear market. The companies pay regular dividends, and their prices are relatively less volatile. However, their earnings are strongly correlated. One does not need to invest in both. This analysis looks at which of the two is a better pick in the bear market.

PepsiCo has an EPS of $7.35, a dividend yield of 2.93%, and a PE of 21.47. The expected EPS growth is 7.57%. The PEG ratio is 3.12. On the other hand, Coca-Cola has an EPS of 2.39, a dividend yield of 2.96%, and a PE of 24.91.

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Coca-Cola has an expected EPS growth rate of 6.99% and a PEG ratio of 3.45. One more differentiating factor is the ROE which is at 63.24% for PepsiCo and 45.61% for Coca-Cola.

Fundamental analysis indicates that PepsiCo is a better stock. However, it is important to look into the technicals before picking either.

PepsiCo has higher market returns than Coca-Cola, on average

Source – TradingView

PepsiCo generally has a higher rate of market return than Coca-Cola. Holding PepsiCo would attract higher gains for nearly the same level of risk. The price of PepsiCo is $157, and that of Coca-Cola is $59. Despite the differences in price, market volatility reflects the same in the two stocks.


PepsiCo and Coca-Cola are both good for the bear market. PepsiCo is however a better stock to hold as compared to Coca-Cola. The PE and PEG ratios show that PepsiCo is priced better than Coca-Cola for the earnings potential.

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