Is Coca-Cola Stock Worth More Than Its Competitors?
Coca-Cola (KO) retains more of each sales dollar as operating profit than any of its five designated peers, a group ranging from PepsiCo to Monster Beverage. The company has also delivered the highest stock return among these six companies over the past year. Yet investors currently pay more per dollar of earnings for three of those peers. So what do those three rivals offer that Coca-Cola does not?
Image from PixabayAre You Paying For Growth Or For Margin?
Two of those three companies provide significantly faster growth, though only one of them does so on its own. Monster Beverage presents the clearest example. The stock trades at 40.1 times earnings, compared with 26.5 for Coca-Cola. Profitability is not what separates the two companies, given that Monster maintains a 29.2% operating margin alongside Coca-Cola’s 31.8%. The true differentiator is growth. Monster posted a 20.4% revenue increase over the last twelve months, while Coca-Cola recorded a 6.5% rise.
Keurig Dr Pepper’s revenue rose 27.5%, and the market prices its stock at a higher multiple of earnings than Coca-Cola’s shares. Much of that growth, however, came from its acquisition of JDE Peet’s, which closed on April 1, 2026. Excluding JDE Peet’s, its sales rose 7.3% in the second quarter, close to Coca-Cola’s pace. Starbucks is the third peer in this expensive tier, though it trails Coca-Cola in both growth and margin. However, the coffee company operates as a restaurant chain rather than a drinks maker. That structural difference means its premium valuation may reveal little about Coca-Cola.
PepsiCo provides a contrasting benchmark. Its revenue expanded at almost exactly the same pace as Coca-Cola’s, but its 15.3% operating margin is less than half of Coca-Cola’s figure. PepsiCo trades at 15.8 times earnings. Investors pay a higher multiple for Coca-Cola than they do for PepsiCo, and the operating margin stands as the visible difference. Conversely, investors pay less for Coca-Cola than they do for Monster, where the difference is growth.
| KO | PEP | KDP | MNST | SBUX | FIZZ | |
|---|---|---|---|---|---|---|
| Market Cap ($ Bil) | 378.9 | 171.8 | 43.2 | 85.4 | 103.4 | 2.9 |
| PE Ratio (LTM) | 26.5 | 15.8 | 30.3 | 40.1 | 52.2 | 16.3 |
| LTM Revenue Growth | 6.5% | 6.4% | 27.5% | 20.4% | 4.5% | -1.8% |
| LTM Operating Margin | 31.8% | 15.3% | 16.6% | 29.2% | 10.1% | 18.4% |
| 12M Stock Return | 34.9% | -5.1% | 27.3% | 28.1% | 17.6% | -8.4% |
Coca-Cola’s Margin Has Risen Three Years Running
Coca-Cola has steadily expanded its profitability. The company reported an operating margin of 28% three years ago and 29.2% two years ago. That metric reached 31% a year ago and stands at 31.8% over the latest twelve months.
At the same time, Coca-Cola’s internal bottling operations are shrinking. Revenue at the Bottling Investments segment fell 7.8% in fiscal 2025, while the North America division, its largest segment, grew 3.8%. In July, management expected the pending sale of Coca-Cola Beverages Africa to close late in the third quarter or in the fourth, subject to regulatory approvals.
What Does Coca-Cola Expect In 2026?
Coca-Cola has projected mid-single-digit sales growth alongside a faster pace of earnings expansion. During the company’s July 28, 2026 call, management raised its forecast for 2026 organic revenue growth to about 5%. That forecast falls within management’s long-term range for organic revenue growth of 4% to 6%, so Coca-Cola is not forecasting Monster-like growth. Management also raised its forecast for earnings per share growth, excluding currency and deals, to a midpoint of 7.5%, up from 6.5%. Earnings growing faster than sales is consistent with a widening margin, so the forecast appears to point the same way as the past three years.
The timing introduces some risk to these projections. Management noted that favorable weather in certain markets, the FIFA World Cup, and an easier comparison with the year before all helped the second quarter. The second half may face a tougher comparison. Furthermore, the fourth quarter contains six fewer days than a year earlier.
Current market pricing appears to assume that Coca-Cola will maintain the highest margin in this peer group while continuing to grow at a mid-single-digit pace. The available evidence supports that thesis. Operating margins have widened each year, and management raised its forecast in July. If Coca-Cola’s 2026 earnings per share grow 7.5% or more, excluding currency and deals, alongside organic sales growth near 5%, the results would be consistent with a still-widening margin.
How To Act On KO?
Now you know KO better. And that’s our purpose: to make you informed before you invest your money. However, making a bet on a single stock carries its own risks.
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