Coca-Cola's Dividend Streak Faces Challenge from Rival PepsiCo
Coca-Cola has maintained its streak of raising dividends through every market crash since 1962. While this impressive track record makes it an attractive choice for income investors, some analysts suggest that it may not be the best option to invest in right now.
The beverage giant earned nearly $26 billion in revenue during the second quarter, a 9% increase from the year-ago period. Its consolidated net income of $8.4 billion also rose 18% over the same time frame. With a 2.4% dividend yield and a 26 P/E ratio mirroring the S&P 500 average, Coca-Cola appears financially healthy.
However, when compared to its rival PepsiCo, which has reinvigorated growth in both its beverage and food businesses, Coca-Cola's valuation seems less attractive. PepsiCo's 54-year streak of payout hikes is less than Coca-Cola's, but the latter's stock has outperformed PepsiCo in recent years.
Some analysts recommend holding onto Coca-Cola stock, given its long-term history and performance. However, with PepsiCo's growth outlook improving and its stock trading at a lower P/E ratio of 17, it may be a better option for investors looking to put new money to work. Ultimately, the decision to invest in Coca-Cola or PepsiCo depends on individual investment goals and risk tolerance.