The Coca-Cola (NYSE: KDP) and Keurig Dr Pepper (NYSE:KDP) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Dividends

The Coca-Cola pays an annual dividend of $1.56 per share and has a dividend yield of 3.3%. Keurig Dr Pepper pays an annual dividend of $2.32 per share and has a dividend yield of 9.8%. The Coca-Cola pays out 81.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Keurig Dr Pepper pays out 51.1% of its earnings in the form of a dividend. The Coca-Cola has raised its dividend for 55 consecutive years. Keurig Dr Pepper is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

The Coca-Cola has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Keurig Dr Pepper has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Earnings & Valuation

This table compares The Coca-Cola and Keurig Dr Pepper’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Coca-Cola $35.41 billion 5.61 $1.25 billion $1.91 24.40
Keurig Dr Pepper $6.69 billion 0.64 $1.08 billion $4.54 5.20

The Coca-Cola has higher revenue and earnings than Keurig Dr Pepper. Keurig Dr Pepper is trading at a lower price-to-earnings ratio than The Coca-Cola, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for The Coca-Cola and Keurig Dr Pepper, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Coca-Cola 0 11 10 0 2.48
Keurig Dr Pepper 0 3 2 0 2.40

The Coca-Cola currently has a consensus target price of $49.63, suggesting a potential upside of 6.51%. Keurig Dr Pepper has a consensus target price of $27.00, suggesting a potential upside of 14.26%. Given Keurig Dr Pepper’s higher probable upside, analysts plainly believe Keurig Dr Pepper is more favorable than The Coca-Cola.

Profitability

This table compares The Coca-Cola and Keurig Dr Pepper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Coca-Cola 7.18% 40.68% 9.34%
Keurig Dr Pepper 16.10% 33.68% 8.14%

Institutional & Insider Ownership

65.6% of The Coca-Cola shares are owned by institutional investors. Comparatively, 89.9% of Keurig Dr Pepper shares are owned by institutional investors. 1.5% of The Coca-Cola shares are owned by insiders. Comparatively, 0.6% of Keurig Dr Pepper shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

The Coca-Cola beats Keurig Dr Pepper on 10 of the 16 factors compared between the two stocks.

About The Coca-Cola

The Coca-Cola Company, a beverage company, manufactures and distributes various nonalcoholic beverages worldwide. The company provides water, enhanced water, and sports drinks; juices; juice, dairy, and plant?based beverages; teas and coffees; and energy drinks. It also offers concentrates, syrups, beverage bases, source waters, and powders/minerals, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products primarily under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, Fanta, Sprite, Minute Maid, Georgia, Powerade, Del Valle, Schweppes, Aquarius, Minute Maid Pulpy, Dasani, Simply, Glacéau Vitaminwater, Gold Peak, FUZE TEA, Glacéau Smartwater, Ice Dew, I LOHAS, and Ayataka brand names. The Coca-Cola Company offers its beverage products through a network of company-owned or controlled bottling and distribution operators, as well as through independent bottling partners, distributors, wholesalers, and retailers. The company was founded in 1886 and is headquartered in Atlanta, Georgia.

About Keurig Dr Pepper

Keurig Dr Pepper Inc. engages in the brewing system and specialty coffee businesses in the United States and Canada. The company sources, produces, and sells coffee, hot cocoa, teas, and other beverages in K-Cup, Vue, Rivo, K-Carafe, and K-Mug pods brands; coffee in traditional packaging, including bags and fractional packs; and other specialty beverages in pods. It distributes its products through at-home and away-from-home channels to retailers, including supermarkets, department stores, mass merchandisers, club stores, and convenience stores; and restaurants, hospitality accounts, office coffee distributors, and partner brand owners, as well as to consumers through its Websites. The company was founded in 1981 and is based in Waterbury, Vermont. Keurig Dr Pepper Inc. is a subsidiary of Acorn Holdings B.V.

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