Comparison of Pepsi and Coca Cola Financials

2588 WordsAug 25, 201111 Pages
Comparison of Pepsi and Coca Cola Financials Introduction Coca-Cola and Pepsi are the two most popular and widely recognized beverage brands in the world. They have been competing in the soft drink sector for over a century and both companies enjoy a high degree of brand consciousness globally. Both companies try to market as part of a lifestyle. Coca-Cola uses phrases such as “Coke side of life” in their website, while Pepsi uses phrases such as “Hot stuff” in their web, to promote the idea that Pepsi is “in sync” with the cool side of life. Ironically, both Pepsi and Coke have similar beginnings: both were created in the 19th century and both were the results of the experimental work of innovative pharmacists. Coke was created in…show more content…
Although Pepsi’s dividend payout ratio is slightly lower than Coca Cola’s, the difference is marginal. (Finance) The Dividend Payout Ratio means the percentage of earnings paid to shareholders in dividends. The payout ratio provides an idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio. This ratio is calculated as Dividends per share / Earnings per share. The Dividend payout ratio for Coca Cola is 48.2% while PepsiCo is 34.8% The price/earnings ratio (P/E) is the best known of the investment valuation indicators. It is the measure of the share price relative to the annual net income earned by the firm per share. The P/E ratio has its imperfections, but it is nevertheless the most widely reported and used valuation by investment professionals and the investing public. The financial reporting of both companies and investment research services use a basic earnings per share (EPS) figure divided into the current stock price to calculate the P/E multiple (i.e. how many times a stock is trading (its price) per each dollar of EPS). A high PE ratio generally indicates increased demand because investors anticipate earnings growth in the future. The PE ratio has units of years, which can be interpreted as the number of years of earnings to pay back purchase price. The price/earnings ratio for Coca Cola is 12.97 while PepsiCo is 16.24. (YCharts,

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