Coca-Cola and PepsiCo have each decided to purchase its bottlers in a move to cut costs and increase distribution flexibility. So should investors buy Coke or Pepsi? Philip Gorham, stock analyst at Morningstar, discussed his stock preference.
“All sparkling drinks have been in decline for the last 10 years or so, but cola’s falling at a faster rate,” Gorham told CNBC.
As a result, Gorham said the ongoing “cola war” will ultimately become a battle against the non-carbonated drinks.
“I would recommend investors look for the company with the strongest portfolio of brands,” he said.
Gorham said he prefers Pepsi over Coke .
“I would go for Pepsi because what we’ve seen over the last year or so is that the snacks portfolio has been counter-cyclical. And with the consumers reigning in their spending, they’ve eaten more at home and that means buying a big bag of chips to take home,” he said.
“So that’s what’s been providing Pepsi with the protection during the downturn.”
More Beverage Industry Views:
CNBC Data Pages:
Pepsi & Coke Compete With:
Dr Pepper Snapple Group
Gorham does not own shares of Coca-Cola or Pepsi.