Coca Cola Co. (KO)
* Market capitalization – 95.38 billion
* P/E ratio – 18.49
* Earnings yield – 5.40%
* Dividend yield – 2.80%
* Return on equity – 33.09%
* Major products – Coke, Sprite, Dasani water, Minute-maid juices, Hi-C juices, Powerade, Nestea.
* Market capitalization – 95.04 billion
* P/E ratio – 24.76
* Earnings yield – 4.04%
* Dividend yield – 1.80%
* Return on equity – 29.14%
* Major products – Pepsi, Mountain Dew, Sierra Mist, Aquafina, Lipton tea, Tropicana juices.
A few weeks ago Pepsico overtook Coca Cola in terms of market capitalization and became the larger company of the two. Today, Coke’s market capitalization is little bit higher than Pepsi’s.
It is hard to predict which soft-drink maker’s stock will outperform going forward. Maybe the race will be neck to neck or Pepsi will be better off on the strengths of its juice and other “non-pepsi” operations. I say, don’t try to pick here. I would rather invest in both of them; make a “soda index” in the portfolio and make it equal weighted and let it ride. The reason for equal weight in the portfolio is that both Pepsi and Coke are close to each other in terms of market capitalization.