This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Is Pepsi Better Than Coke?

NEW YORK ( TheStreet) -- A lot of questions were raised when shares of Pepsico (PEP - Get Report) recently reached a new 52-week high of $87.06. Not only did this elevate Pepsi's year-to-date gains to 30%, but Pepsi investors have begun to proclaim how their stock is now running laps around Coca-Cola (KO - Get Report), whose year-to-date gains have yielded "only" 15%.

I say "only" in this manner because I don't believe in discounting double-digit gains in any market. While it is indeed impressive that Pepsi, a stock that I've long believed was undervalued, is now doing so well, I wouldn't get carried away here just yet. But I will say that I believe that Pepsi has earned the right to be in the "front-line" or on the marquee. To say it another way, I'm not ready to declare that Pepsi has passed Coca-Cola, but after looking at Pepsi's second-quarter earnings results, I don't believe that Pepsi is still playing second fiddle to its larger rival.

With obesity concerns plaguing soft-drink companies, it hasn't been a great year for the industry as most companies, including Coca-Cola and Dr Pepper Snapple (DPS), posted significantly less volumes in the second quarter. But unlike Coca-Cola and Dr Pepper Snapple, which posted revenue declines of 3% and 1% respectively, Pepsi managed to grow revenue by 2% year over year, which beat Street expectations.

Even more impressive was that when looking at Pepsi's report on an "organic basis", which focuses solely on the company's internal operations, revenue growth was closer to 4% year over year. But it wasn't all good news. "Liquid candy." a term used to describe soda and other carbonated sugar-filled beverages, is at the top of the list of those trying to bring nutritional awareness to the obesity dilemma -- a disease impacting close to 40% of Americans.

One of the ways that Coca-Cola has tried to augment its nutritional profile is by introducing a product called Coca-Cola Life, a new drink that uses a blend of sugar and Stevia, a plant-based sweetener that has no calories. But we've been down this road before with Coke Zero. This does not mean that Coca-Cola Life will suffer a quick death.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
KO $42.45 -0.12%
PEP $97.53 0.17%
AAPL $126.69 -1.40%
FB $81.62 0.90%
GOOG $576.35 0.52%

Markets

DOW 18,137.33 +40.43 0.22%
S&P 500 2,100.24 +1.71 0.08%
NASDAQ 4,980.6170 +13.4760 0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs