I've owned stock in KO the last 10 years and will continue to add to my position in it. It's roughly 25% of my portfolio now. However I'm adding more PEP (roughly 8-percent of my portfolio now) because of its higher dividend, I like the company's financials and I love the diversification of its snacks business and the uptick in growth prospects that'll bring the company for many years. Within a couple of years I hope to have PEP as roughly 15-17 percent of my portfolio.
Both are winners, both are good ports in a storm with so much volatility in the market and you can't kill either. Even people in a depression, even people on food stamps are purchasing products from KO, PEP, P&G, KFT, KMB, JNJ and HNZ, which is why I own stock in all those companies.
I'm not the most diversified investor, but I strongly believe in buying stock in companies that can't be killed whose products can't be affected a lot by the volatility in the market or the Internet or technology. In other words, the Internet isn't going to affect the way people drink PEP or KO or eat potato chips.
I still rate KO slightly higher than PEP because it's been around longer, it possesses the most recognizable brand on the planet and it's been raising its dividend longer/more consistently, though I do believe KO could and should be less stingy with its dividend. It's a big reason why I took all my shares out of XOM and put them into COP.
I think you need to include DPS in this mix. Higher divy with a slightly lower payout ratio, and a lower PE. DPS should have faster growth being smaller and less well known outside of USA. Pepsi is a distributor of DPS products too.
I own PEP over KO for the reasons mentioned, but have some DPS too. (suggest waiting for a pulLback to buy).
Also looking at that exact same thing. I am leaning toward PEP because of the potential of the the combo with their food products versus KO with just drink. Also think that PEP is a company that always seems to be looking to the future versus KO. Financials seem to be a bit better to me also. I should add that either one you can't go wrong.What tips me to PEP finally is the lower beta of PEP. Hope to hear from others
I'm also facing the same decision of whether to invest in PEP or KO. I was just thinking about it yesterday, in fact ;)
As a consumer, I prefer to drink KO's products over PEP's products, but as an investor, I am leaning toward PEP because it has a slightly higher dividend yield, a more favorable PE ratio right now, and I think their snacks business is a winner.
Over the long term, KO and PEP are probably both great in terms of safety and income... but I'm probably going to go with PEP because of the higher divy.