Best Stock to Buy Right Now: PepsiCo vs. Coca-Cola

Core Viewpoint - The recent stock market volatility has led investors to favor stable consumer staples, particularly those with predictable dividend growth, with PepsiCo showing resilience while Coca-Cola demonstrates stronger growth metrics [1][2]. Growth and Outlook - Coca-Cola has outperformed PepsiCo in organic sales growth, achieving a 14% increase compared to PepsiCo's 2% [2]. - Coca-Cola projects organic revenue growth of 5% to 6% for the upcoming year, while PepsiCo anticipates low-single-digit revenue gains [2]. - PepsiCo's sales volume declined by 1% last quarter, contrasting with Coca-Cola's 2% increase, indicating Coca-Cola's better pricing power and volume retention [3]. Cash Flow and Returns - PepsiCo plans to allocate $7.6 billion for dividends and$1 billion for stock buybacks in 2025 [4]. - Coca-Cola spent $8 billion on dividends and$1.1 billion on stock buybacks last year, with both companies increasing their dividends by 5% in 2025 [5]. Valuation - PepsiCo shares are trading at 18 times expected earnings, while Coca-Cola's forward P/E is 24, indicating a valuation premium for Coca-Cola [6]. - In terms of revenue valuation, PepsiCo trades at 2.3 times revenue compared to Coca-Cola's 6.5 times [6]. Profitability - Coca-Cola boasts a higher operating profit margin of 30%, significantly surpassing PepsiCo's 14% [7]. - Coca-Cola's strong growth and profitability justify its premium valuation, making it a preferred choice for many investors [8]. Investment Preference - While PepsiCo offers a higher yield at 3.55% compared to Coca-Cola's 2.7%, Coca-Cola's overall business performance and stability make it a more attractive investment [5][8]. - Coca-Cola's consistent dividend increases, marking its 63rd consecutive year, solidify its status among Dividend Kings [8].