Best Beverage Stocks: Coke, Pepsi

BOSTON (TheStreet) -- The following stocks earn "buy" ratings from TheStreet.com's quantitative model. They're ordered by potential to appreciate, from worst to best.

5. PepsiCo ( PEP) sells soda and snack foods.

The numbers: Fourth-quarter profit doubled to $1.4 billion, or 90 cents a share, as revenue grew 4.5% to $13 billion. The operating margin expanded from 14% to 15%. PepsiCo's balance sheet contains $4.1 billion of cash and $7.9 billion of debt.

The stock: PepsiCo advanced 26% in the past year, lagging behind major U.S. indices. The stock trades at a price-to-projected-earnings ratio of 14, a 16% discount to the industry average. The shares offer a 2.9% dividend yield and have a low beta of 0.5.

4. Brown-Forman ( BF.A) makes Jack Daniel's Tennessee Whiskey.

The numbers: Fiscal second-quarter profit inched up 2.8% to $147 million, or 99 cents a share, as revenue decreased 5.3% to $699 million. The operating margin extended from 29% to 32%. Brown-Forman holds $289 million of cash and $963 million of debt.

The stock: Brown-Forman returned 24% in the past year, underperforming U.S. benchmarks. The stock trades at a price-to-projected-earnings ratio of 17, a premium to competitors. It is cheap based on book value. The shares offer a 2.2% dividend yield.

3. Coca-Cola ( KO) distributes soda and syrups worldwide.

The numbers: Fourth-quarter profit rose 55% to $1.5 billion, or 66 cents a share, as revenue ascended 5.4% to $7.5 billion. Coca-Cola's operating margin remained steady at 25%. Its balance sheet houses $9.2 billion of cash and $12 billion of debt.

The stock: Coca-Cola increased 28% over the past 12 months, trailing U.S. indices. The stock sells for a price-to-projected-earnings ratio of 14, a discount to peers. The shares offer a 3.1% dividend yield and have a comparatively low beta of 0.6.

2. National Beverage Corp. ( FIZZ) produces the Shasta and Faygo soda brands.

The numbers: Fiscal second-quarter profit rose 28% to $8.3 million, or 18 cents a share, as revenue grew 3.6% to $150 million. The operating margin rose from 6.6% to 9.2%. National Beverage holds $105 million of cash, equating to a quick ratio of 2.8, and no debt.

The stock: National Beverage Corp. rallied 36% in the past year, less than major U.S. indices. The shares are cheap relative to those of beverage peers based on all of our valuation measures, including projected earnings, book value, sales and cash flow.

1. Boston Beer Co. ( SAM) brews Sam Adams beer.

The numbers: Boston Beer Co. swung to a third-quarter profit of $10 million, or 72 cents a share, from a loss of $300,000, or 2 cents, a year earlier. Revenue grew 5% to $109 million. The operating margin widened from 2.7% to 16%. The company holds no debt.

The stock: Boston Beer Co. more than doubled in the past year, outperforming U.S. benchmarks. The stock trades at a PEG ratio, a measure of value relative to growth, of 0.1, a 93% discount to the industry average. A PEG ratio below 1 implies cheap shares.

-- Reported by Jake Lynch in Boston.

More from Investing

Howard Schultz to Jim Cramer: Starbucks Stock Is Cheap and Undervalued

Howard Schultz to Jim Cramer: Starbucks Stock Is Cheap and Undervalued

Jim Cramer: Some Industrials Stocks Are Becoming Great Values

Jim Cramer: Some Industrials Stocks Are Becoming Great Values

Jim Cramer: Reports of Attempted Trade Truce With China Are False

Jim Cramer: Reports of Attempted Trade Truce With China Are False

GM's New Chevy Blazer Looks as Lame as the Stock Market Right Now

GM's New Chevy Blazer Looks as Lame as the Stock Market Right Now

Video: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Video: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat