Pepsi, Coke, Dr Pepper Snapple: Which Beverage Stock Will Pop?

Which industry giant will win in the competitive world of food and beverages this year -- Pepsi, Coke or Dr Pepper Snapple?
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NEW YORK (TheStreet) -- Which industry giant will win in the competitive world of food and beverages this year? Pepsi (PEP) - Get Report, Coke (KO) - Get Report or Dr Pepper Snapple (DPS) ?

Pespi came out with its second-quarter earnings report on Tuesday, maintaining its earnings per share growth target of 11% to 13% for the full year from its fiscal 2009 core EPS of $3.71 after reporting earnings and revenue that topped second-quarter estimates. The company also said that it's targeting pretax annualized synergies from its recent bottling acquisitions of about $400 million once fully implemented by 2012, with one-time costs of about $650 million to achieve these synergies.

Synergies to be realized in 2010 are expected to total about $125 million to $150 million.

Pepsi said that it's stepping up incremental investments around the world to capitalize on untapped consumer demand, including investments in marketplace infrastructure to support both the company's expanding China beverage business and innovation across its global snacks portfolio. Currently the company has the world's largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales.

Pepsi, whose main businesses include Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade, has annualized revenues of nearly $60 billion.

As the company was negotiating its bottling acquisitions late last year, PepsiCo reached an agreement with Dr Pepper Snapple to manufacture and distribute certain Dr. Pepper Snapple products in territories where they're were being distributed by Pepsi Bottling Group and PepsiAmericas for an upfront payment of $900 million.

Recently, Dr Pepper Snapple also agreed to license certain brands to Coke on completion of the soda giant's proposed acquisition of

Coca-Cola Enterprises'


North American bottling business for a one-time cash payment of $715 million. In its first-quarter earnings report, Pepsi said that it remains "focused on completing key infrastructure investments in 2010 and capitalizing on continuous improvement opportunities."

Dr Pepper Snapple is a leading producer of flavored beverages in North America and the Caribbean, fueled by more than 50 brands, including its flagship Dr Pepper and Snapple brands, Sunkist soda, 7UP, A&W, Canada Dry, Crush, Mott's, Squirt, Hawaiian Punch, Penafiel, Clamato, Schweppes, Venom Energy, Rose's and Mr & Mrs T mixers. The company reports on Jul 29 before the market open.

In its first-quarter earnings release, Coke said that looking ahead to the year 2020, it sees sgrotrong wth opportunities for the company's franchise system and for the entire nonalcoholic ready-to-drink beverage industry. "We are working closely with our bottling partners around the globe, leveraging our scale and the increased presence of our brands," the company said.

The Coca-Cola Company is the world's largest beverage company, with a portfolio of more than 500 sparkling and still brands. In addition to its flagship brand, the company's portfolio includes 12 other billion-dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply and Georgia Coffee. Its next earnings release will be on Jul. 21 before the market open.

In light of all this, which of the three beverage industry giants do you think are poised to win in the second half of 2010? Take the poll below to see the consensus of



Pepsi Around the World: Interactive Map

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Pepsi Maintains Full-Year Growth Target

Click here for Pepsi's second-quarter earnings

-- Reported by Andrea Tse in New York


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