Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Coca-Cola Company (KO): Can This New Soda End a Sugar Slump?

Sodastream International Ltd (NASDAQ:SODA) has lured some users at the margin, but it has yet to grab a hold of big restaurant chains or vending distribution, which are vital methods for staying in the customers’ mind. Plus, the company lacks the brand power inherent in the centuries-old brands of Coke and Pepsi.

For now, The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP) are safe. Consumers want convenience and health, not just health or not just convenience. Furthermore, the two brands have ample pricing power, which can be seen by the fact that soda prices are rising much faster than soda consumption is declining.

Whether the future drink is soda or some new crazy water cocktail, world citizens will still need 64 ounces of fluids each day. Luckily for The Coca-Cola Company (NYSE:KO) and Pepsi, the distribution systems around the world are set up to sell their stuff.

At 17 times forward earnings, investors are not overpaying for a quality, leading company like Coca-Cola. But, if snacks, not just sodas, are more your fancy, you may favor PepsiCo, Inc. (NYSE:PEP)’s diversified model, which investors let go for a discount at 16 times forward earnings expectations.

New products will help keep these brands on the top of their game, but their distribution power cements them at the top, no matter what people drink.

The article Can This New Soda End a Sugar Slump? originally appeared on and is written by Jordan Wathen.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool recommends The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP), and SodaStream. The Motley Fool owns shares of PepsiCo and Sodastream International Ltd (NASDAQ:SODA). Jordan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.