Global beverage and food giant PepsiCo (NYSE:PEP) reported anemic sales and profit growth during its first quarter, but the next couple of years should see accelerated growth trends. This coupled with a more reasonable valuation than an archrival makes Pepsi a more appealing investment.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

First Quarter Recap
Total net revenues advanced 4% to $12.4 billion. Pepsi divides its results into three primary geographic regions. The Americas, which is divided into the food and beverage product segments, reported growth of 5% and a fall of 2%, respectively. Quaker Foods North America was the laggard with negative growth of 3% and the beverage operations, which are closely aligned with Yum Brands' (NYSE:YUM) domestic restaurants, also logged negative growth of 2%. Latin American food growth was strongest at 11%, while Frito Lay North America also performed admirably and reported top line growth of 4%. Europe reported surprisingly robust growth of 13% while Asia was also strong, up 12%.
Higher commodity costs and sluggish sales growth resulted in a divisional operating profit fall of 1% to $1.9 billion, though the profit level was still quite healthy at 15.3%. Reported earnings growth was flat at 71 cents per diluted share. However, Pepsi estimated its core, or operating profit growth was negative at 6%.

SEE: Understanding The Income Statement

Outlook and Valuation
Analysts project very modest full year sales growth of 2.4% and total sales of $67.5 billion. The current earnings projection currently stands at $4.11 per share. Growth for 2013 is expected to improve to sales growth of 4.5% (total sales of nearly $71 billion) and profit growth of 8.3% to $4.44 per share. This represents a forward P/E of 16.1 and 14.9, respectively, base off the current share price of $66 per share.

The Bottom Line
Over the next couple of years, Pepsi and archrival Coca Cola (NYSE:KO), which is currently thought to be interested in acquiring fast-growing rival Monster Beverage (Nasdaq:MNST), should grow at about the same rate. However, Coca Cola has been posting much higher growth levels in recent years and investors have awarded it with a higher forward earnings multiple of 17.11, based off 2013 full year projections.

Pepsi currently sports a higher dividend yield of 3.1%, versus Coke's 2.7%. Dr. Pepper Snapple (NYSE:DPS) is the highest at 3.4%, but will be slower growing because it serves primarily the U.S. market. Coke and Pepsi offer a decent combination of modest growth with downside protection given underlying demand is generally stable. But Pepsi looks the better investment given its lower earnings multiple.

SEE: 5 Must-Have Metrics For Value Investors

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.