How Did Coca-Cola Stock Leave PepsiCo Behind?
For questions about this article or underlying research, email help@trefis.com.
Two companies in the same industry grew their sales at single-digit yearly rates over the last three years. Over the five years to November 2026, however, one stock gained 97.7% and the other 1.5%. The first is Coca-Cola (KO), and the second is PepsiCo (PEP). So where did the gap come from: faster growth, more profit per share, or investors paying more?
Who Has Beaten PepsiCo Over Five Years?
Over those five years, PepsiCo’s stock did better than five of the 12 other beverage companies in its industry. Two companies with sales growth close to PepsiCo’s performed much better, however, and Coca-Cola’s stock finished 96.3 points ahead.
| Company | Sales growth, 3-year average | P/E | 1-year | 3-year | 5-year |
|---|---|---|---|---|---|
| PepsiCo (PEP) | 2.4% | 17.6x | 0.0% | -6.2% | 1.5% |
| Coca-Cola (KO) | 4.3% | 28.2x | 42.8% | 84.1% | 97.7% |
| Coca-Cola Consolidated (COKE) | 5.8% | 25.4x | 61.6% | 232.4% | 436.8% |
Total return to 2026-11-02, including dividends. Companies in Soft Drinks & Non-alcoholic Beverages whose sales grew within 4 points of PEP’s. P/E: latest close over the last four quarters’ earnings per share.
Coca-Cola Consolidated (COKE), a U.S. bottler of mostly Coca-Cola drinks, also beat PepsiCo by 435.3 points. Both beverage companies left PepsiCo’s stock far behind.
Did Coca-Cola Grow Faster Than PepsiCo?
The difference is small. Over the last three years, Coca-Cola grew its sales by an average of 4.3% a year, compared with 2.4% for PepsiCo. Between the four quarters ended in 2021 and the latest four quarters, Coca-Cola’s sales rose 35.1% and PepsiCo’s climbed 28.1%. That represents a small edge given how far apart the two stocks finished.
Coca-Cola operates as a beverage company, selling soft drinks, water, sports drinks, juice, tea and coffee through independent bottling partners, distributors and retailers. PepsiCo also sells food, and its PepsiCo Foods North America segment generated 29.3% of its revenue in fiscal 2025.
Where Did The Gap Come From?
Profit per share accounts for the first part of the difference. From the four quarters ended in 2021 to the latest four, Coca-Cola’s earnings per share rose 66.7%, nearly double the 35.6% reported by PepsiCo. Coca-Cola also kept more of each dollar it sold, widening its operating margin by 1.8 points while PepsiCo’s barely moved.
Investors also adjusted the prices they pay. In 2021, they paid about 25.5 times earnings for each company. Today, they pay 28.2 times for Coca-Cola and 17.6 times for PepsiCo. The 2021 multiples are priced as of September 30, 2021, and the stock returns above include dividends, so these figures do not exactly match those returns.
Profit per share and the price investors pay for it both made the difference. PepsiCo’s own earnings per share rose, yet investors now pay so much less for each dollar of that profit that the stock barely moved. Coca-Cola’s faster profit growth, meanwhile, came with a higher price on it.
PepsiCo’s own margin is under pressure. On its October 8, 2026 call, management said margin performance is below where it expected and that input costs are trending higher. PepsiCo has chosen to sustain key investments to stimulate growth, management said, while cutting overheads and any other cost that is not linked to growth.
What To Watch In PepsiCo’s Next Report
In its October 8 release, PepsiCo raised its forecast for fiscal 2026 net revenue growth to 6.0%. Its organic revenue growth forecast stayed at 3.0%, with currency and acquisitions each adding 1.5 points. The company used the same release to cut its core earnings per share growth forecast to 3.0% at the midpoint, down from 6.0%. Management said commodity costs are ramping up, and some of that will show in the fourth quarter as hedges roll off.
PepsiCo’s operating margin, which stood at 15.3% over the last four quarters, is the number to watch when it reports in February 2027.
How To Act On PEP?
Not necessarily on PepsiCo alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from PepsiCo’s own industry that have beaten it. Over the five years to November 2026, Coca-Cola stock rose 97.7% and Coca-Cola Consolidated stock rose 437%, while PepsiCo stock rose 1.5%.
Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.
Spot an error or want more like this? Tell us in 10 seconds.