Coca-Cola Stock Has Momentum, PepsiCo May Be the Better Buy

Group 1: Company Performance - The Coca-Cola Company (KO) stock is up 14.5% in 2025, outperforming the sector average, while PepsiCo (PEP) stock is down 13.5% and near 52-week lows [1] - Coca-Cola's dividend yield is 2.87%, with an annual dividend of $2.04 and a 64-year track record of dividend increases [4] - PepsiCo's dividend yield is 4.33%, with an annual dividend of $5.69 and a 54-year track record of dividend increases [8] Group 2: Financial Metrics - Coca-Cola's stock is trading at approximately 28x earnings and 24x forward earnings, both above the average for soft drink stocks at 20.4x [5] - PepsiCo's financial performance shows it paid $5.42 per share in dividends in 2024 while generating only $5.28 per share in free cash flow, indicating reliance on cash reserves [9] - Analysts forecast a consensus price target of $75.08 for Coca-Cola stock as of May 28 [6] Group 3: Market Trends and Challenges - The consumer staples sector is facing challenges due to a weakening economy, with the iShares U.S. Consumer Staples ETF up about 8% in 2025 but encountering resistance near its 52-week high [3] - Both Coca-Cola and PepsiCo are impacted by GLP-1 drugs that lower cravings, with inflation affecting consumer choices [10] - PepsiCo's stock is trading at a discount at 18x earnings, indicating it may be oversold [11]