Coca-Cola vs. PepsiCo: What's the Better Buy?

Group 1: Overview of Companies - Coca-Cola (KO) and PepsiCo (PEP) are leading companies in the Consumer Staples sector, known for their long-standing operations and shareholder rewards [1] - Both companies are considered defensive stocks, providing consistent sales across various economic conditions and a history of increasing quarterly dividend payouts [2] Group 2: PepsiCo Performance - PepsiCo reported mixed quarterly results, exceeding sales expectations but falling short on EPS, with sales down 2% and EPS at $1.33, a 10% decline from the previous year [4] - The company faces profitability challenges due to sensitivity to margins and geopolitical factors, although long-term margin trends remain constructive [5][6] - CEO Ramon Laguarta highlighted resilience amid complex geopolitical and macroeconomic conditions, but warned of increased supply chain costs and subdued consumer conditions [8][10] Group 3: Coca-Cola Performance - Coca-Cola has consistently outperformed PepsiCo, exceeding consensus EPS and sales expectations for the last ten quarters, leading to a favorable Zacks Rank of 2 (Buy) [11] - The latest earnings report showed a 5% growth in adjusted EPS to $0.77 and a 6% increase in organic revenues year-over-year, with a 5% rise in price/mix [14] - CEO James Quincey emphasized the company's ability to navigate external challenges and create long-term value through a strong global presence [14] Group 4: Comparative Analysis - The performance disparity between Coca-Cola and PepsiCo raises questions about which stock is a better buy, with Coca-Cola currently having a stronger setup evidenced by Zacks Ranks and recent price action [2][15]