NEW YORK (TheStreet) -- Global beverage giant Coca-Cola (KO - Get Report) will report fourth-quarter and full-year results Tuesday before the opening bell. With just 2% stock gains in 2014 compared with 14% gains for rival PepsiCo (PEP - Get Report) , Coca-Cola shareholders must be wondering why they hang around.
Coca-Cola shares are down 1.37% for the year to date, trailing the broader averages, which have traded flat. By contrast PepsiCo shares are up 2.5%. But this is no taste test. Coke is going flat and needs something to put the fizz back.
In the meantime, there are other places for your investment dollars, specifically two companies in which Coke has bought major stakes -- Monster Beverage (MNST) and Keurig Green Mountain Coffee (GMCR) .
In the meantime, there are other places for your investment dollars, specifically two companies in which Coke has bought major stakes -- Monster Beverage (MNST) and Keurig Green Mountain Coffee (GMCR) .
Must Read: 16 Rock-Solid Dividend Stocks With 50 Years of Increasing Dividends and Market-Beating Performance
Coke, Atlanta, spent $2.15 billion for a 17% stake in Monster Beverage (MNST) last year. This was done after it bought an additional 6% stake in Keurig Green Mountain (GMCR) last May, upping its holdings to 16% and becoming Keurig Green Mountain's top owner.
So it makes more sense for Coca-Cola investors to buy shares in Monster.
Besides, Coca-Cola shares are not cheap. They trade at 23 times trailing earnings, which is three points higher than the average price to earnings ratio of companies in the S&P 500 (SPX) . it is also three points higher than PowerShares Dynamic Food & Beverage Portfolio (PBJ) , which includes PepsiCo, Monster Beverage and Dr Pepper Snapple (DPS) .
Dr. Pepper Snapple's shares are up nearly 9% for the year to date with a P/E ratio almost two points lower than Coca-Cola. Coke's higher P/E implies Wall Street still expects the company to turn things around and outgrow its peers -- something it hasn't been able to do in almost two years.
Dr. Pepper Snapple's shares are up nearly 9% for the year to date with a P/E ratio almost two points lower than Coca-Cola. Coke's higher P/E implies Wall Street still expects the company to turn things around and outgrow its peers -- something it hasn't been able to do in almost two years.
For the quarter ending in December, Coke is expected to report 42 cents per share in earnings on revenue of $10.76 billion, representing year-over-year declines of 8% and 2.5%, respectively. For the full-year, earnings are projected to decline 2% year over year to $2.03 per share, while revenue is expected to be $45.9 billion, down 2% year over year.
No comments:
Post a Comment