KO Blows Past PEP: Five-Year Return Gap Hits 81 Points

The five-year performance of Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) has been starkly different. While Coca-Cola has seen an impressive +84.09% return over this period, PepsiCo's growth has been much more modest at +3.08%. The two companies' Q2 2026 results reveal a significant gap between their operations.

Coca-Cola's concentrate model allows the company to offload capital intensity to bottlers, resulting in a gross margin of 61.6% and an operating margin of 28.7%. In contrast, PepsiCo's combined snacks and beverages operation runs trucks, plants, and chip lines, producing a gross margin of 54.1% and an operating margin of 14.4%. This structural difference explains the return gap between the two companies.

PepsiCo has struggled with snack softness and beverage margin pressure, while Coca-Cola has benefited from its focus on pure beverages. The company's Q2 results saw a 16% increase in global unit case volume for Coca-Cola Zero Sugar across every segment.