CNBC Stock Blog

Pepsi vs Coke: Stock Analyst 'Taste Test'

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. 

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Coke vs. Pepsi

“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.”

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Pepsi & Coke Compete With:

Dr Pepper Snapple Group

Kraft Foods

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Disclosures:

Gorham does not own shares of Coca-Cola or Pepsi.

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