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Tickers in this Article: KO, PEP, KFT, CAG
For years now consumers and some analysts have been in an almost endless debate about whether Pepsi (NYSE:PEP) or Coca Cola (NYSE:KO) sells the better soda. Today, I am not going to debate taste, but rather provide some thoughts on the two soda giants from an investment perspective. Note that Pepsi is scheduled to release its second quarter earnings in the latter part of July.

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The Big Picture
Both companies have the potential to generate large sales as the U.S. economy rebounds, and furthermore growing populations around the world present opportunities. The recent performance of both companies is also worth discussing. Earnings data shows that Pepsi has beaten expectations in three of the last four quarters while Coke has beaten in two of the last four quarters. In this environment, both companies have something to be proud of and I can declare no winner here.

Looking at growth expectations, Wall Street figures that Pepsi can grow at an 8.2% rate per annum in the next five years, while analysts think that Coke can grow 8.5% per annum in the next five years, so things are about equal on that front. As far as price-to-expected earnings are concerned, Pepsi trades at about 15.2 times this year's estimate, while Coke trades at 15 times this year's estimate. Again, things appear to be pretty equal.

On the dividend front, Coke offers a dividend and the yield is about 3.4%, while Pepsi's forward yield is about 3%. Again, things are pretty equal. And so the bottom line is that when it comes to these cola giants, it is hard to pick at this time and I am bullish on both.

All of this cola talk has me thinking about other food plays that I think are a good bargain.

A Krafty Company
Kraft (NYSE:KFT) is a favorite food stock of mine for several reasons. The company has a number of high-profile, high revenue-generating products ranging from Maxwell House to Oreos that have been incredibly popular for a long period of time. Kraft has also done well by its shareholders when it comes to earnings, having consistently beaten Wall Street expectations this past year according to earnings data.

Omaha-based ConAgra (NYSE:CAG) is another favorite, as it has a big name and has met or beaten expectations in the last three quarters. ConAgra trades at 14.3 times this year's estimate, which doesn't seem too high of a high price to pay given its potential to generate earnings in the future. That being said, I would be more bullish if I saw a fleet of insiders gobbling up the stock at the current prices.

Bottom Line
When it comes to Coke and Pepsi, it's hard to pick the better company right now, and I like both. Investors should keep an eye on Pepsi, because it is reportedly due out with earnings in July and Wall Street is expecting the company to earn $1.09 per share. (For more, see Analyst Forecasts Spell Disaster For Some Stocks.)

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