Buy Coca-Cola when the markets are jittery and PepsiCo when the markets are bullish

In the cola wars, it is easy for consumers to pick the preferred taste between Pepsi-Cola and Coca-Cola. In the investment space, however, that decision is not as straightforward. We seek to make the investment decision a little less complex by assessing the two stocks comparatively.

The Coca-Cola Company (NYSE:KO) is trading at $60.98. On its part, PepsiCo (NASDAQ:PEP) is trading at a price of $164.47, showing quite a significant difference in terms of absolute pricing. However, the price data alone does not quite complete the picture of which is the better buy.


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PEG ratio is at 3.25 for PepsiCo and 2.95 for Coca-Cola. Both companies are therefore viewed unfavorably. PepsiCo has a B-rated value, growth, and momentum style, while Coca-Cola is D-rated. Still, Zacks Research ranks PepsiCo as a hold while Coca-Cola is a buy at the prices above.

PepsiCo offers more returns for higher volatility in bullish markets 

Source – TradingView

PepsiCo’s total market gains at 46% are higher than Coca-Cola’s at 33.64%. The two stocks are strongly correlated, and currently, they are both generally on a downward momentum. It is worth noting that PepsiCo does not just have a higher price in the market but also comes with higher volatility.

When the market is on the decline, PepsiCo drops faster, and when it is gaining, it rises more than Coca-Cola. When investing, therefore, investors would be informed more by their risk appetite than any fundamental differences between the two stocks.

Summary

Considering the circumstance of the current declining market, Coca-Cola would be a better buy than PepsiCo because of its lower volatility. In a bullish market, however, PepsiCo would be a better stock to hold.

In whatever the case, investors need to closely observe the buy and sell signals from MACD and RSI before making the decision.

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Source: https://invezz.com/news/2022/03/25/buy-coca-cola-when-the-markets-are-jittery-and-pepsico-when-the-markets-are-bullish/