Cola Wars: Coke vs. Pepsi

Updated from 7:59 a.m. EDT

By Stockpickr Guest Columnist Doug Hall

Investing requires tradeoffs. You can usually buy this stock or that one, but not both (unless you're Warren Buffett). If you have identified an industry you want to invest in, your returns will generally improve if you pick the best one in that industry.

Coke(KO Quote) and Pepsi(PEP Quote) compete head-to-head for your beverage dollars. But which is a better buy right now?

While not identical, these two companies are ideal for comparison using a seasonal forecast approach. Soft drink sales are very seasonal; we're all having picnics and going to ball games in the spring and summer months.

All things being equal, Coke gathers about 53% of its annual revenue during the spring and summer quarters. Pepsi, which has more food in its pantry, has a different pattern, with its best quarter of the year being the last. I guess people are eating chips and dip while drinking beer during football games and New Year's Eve parties. Nearly 30% of Pepsi's seasonally adjusted sales occur in the quarter ending on Dec. 31, 2007.

So which one is currently a better investment?

To find out, please click here.