Head-to-Head: Pepsi vs. Coke, which is a better buy?
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The soft drink arena is a competitive landscape headlined by Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP). As defensive stocks, KO and PEP have been able to remain in the green in 2022 while the broader markets have sold off.
The major market averages have struggled all year, dragged down by elevated levels of inflation, recessionary talks and geopolitical global tensions. Meanwhile, on a year-to-date basis, KO is +0.5% and PEP has gained 4.6%.
While KO and PEP continue to compete for market share in the fiercely competitive soft drink world. Here's a look at the rivals head-to-head:
Seeking Alphaâs Quant Ratings:
Seeking Alphaâs Quant Ratings deliver insight into the underlying fundamentals driving a stockâs performance. For KO and PEP, the grading system views both stocks as a Hold.
The two stocks are closely matched in the Quant Ratings. Both names received an A+ from a profitability stance. KO edged out PEP with a D compared to a D- in its valuation. Meanwhile, PEP has a slight advantage in growth, with a D+ versus a D. PEP did jump a full letter grade on KO when factoring in the firmâs momentum as PEP received an A- and KO took a B-.
Here's a breakdown of the Quant Ratings:

Wall Streetâs Ratings:
The Street views KO as a Buy with 12 of 26 analysts over the past 90 days classifying the company as a Strong Buy. At the same time, Wall Street also placed PEP as a Buy as well. Regarding PepsiCo, 6 analysts listed the stock as a Strong Buy out of 22. See a breakdown below:

Fundamental Figures:
Looking under the hood, PepsiCo revealed gross profits of $44.53B whereas Coca-Cola delivered gross profits of $24.77B.
Switching gears to the balance sheet, PEP holds more net debt than KO at $32.50B compared to $27.97B. From a cash flow perspective, both companies have similar net operating cash flows. For KO, the total reached $11.46B, while PEP announced $11.29B.
Past Performance:
Looking at stock performance, PEP has significantly outperformed over multiple timeframes. Here's a breakdown of past performance:

What Others Say:
The Value Investor, a Seeking Alpha contributor views KO as a Hold. The contributor highlighted âIn a tough quarter, Coca-Cola is able to grow sales and earnings at a decent clip.â
Moreover, Josh Arnold, another SA contributor, labeled PEP as a Buy. Arnold stated: âThe stock has vastly outperformed the broader market this year, and to my eye, it looks like it has some more upside in the coming weeks. I don't see the stock as particularly cheap for the longer-term, but coming off of a strong earnings report, the intermediate term looks favorable.â
Other Choices:
Coca-Cola (KO) and PepsiCo (PEP) are not the only consumer staples and beverage firms for investors on the Street to choose from. If a market participant is not a fan of either stock, other potential names to pick from include Keurig Dr Pepper (KDP), Vita Coco Company (COCO), Monster Beverage Company (MNST), Suntory Beverage & Food Limited (OTCPK:STBFY), and Prime Water Company (PRMW).
An investor can also diversify their approach to KO and PEP by looking into exchange traded funds.
KO sits inside of 285 ETFs but the three funds that allocate the largest positions towards the stock are the iShares U.S. Consumer Staples ETF (IYK) at 10.90%, Consumer Staples Select Sector SPDR Fund (XLP) at 10.27% and the Vanguard Consumer Staples ETF (VDC) at 9.04%.
PEP is found in 292 ETFs but the three largest holders of the firm are the iShares U.S. Consumer Staples ETF (IYK), which has a 11.39% weighting towards PEP, along with the Consumer Staples Select Sector SPDR Fund (XLP) and Fidelity MSCI Consumer Staples Index ETF (FSTA) as they have 10.75% and 8.60% portfolio weightings in PEP.
For another side-by-side comparison of the two check out Seeking Alphaâs analysis on both KO and PEP.