We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PepsiCo vs. Keurig: Which Beverage Giant Is a Refreshing Pick?
Read MoreHide Full Article
Key Takeaways
PepsiCo generated $37B in international sales, 40% of revenues, with strength in snacks and zero-sugar drinks.
PEP expects to return $8.6B to shareholders in 2025 through dividends and buybacks despite cost pressures.
KDP Q2 net sales rose 7%, with Dr Pepper gaining share, but tariffs and coffee softness weigh on margins.
In the sparkling world of beverages, few rivalries capture investor attention like PepsiCo Inc. (PEP - Free Report) and Keurig Dr Pepper Inc. (KDP - Free Report) . Both companies command strong positions in the global refreshment market, but they operate from distinct platforms of scale, strategy and product reach.
PepsiCo, a household giant with a sprawling portfolio spanning carbonated drinks, snacks and nutrition-focused brands, leverages its global distribution muscle and diverse product mix to defend its market share against both traditional rivals and rising health-conscious challengers. Keurig, in contrast, punches above its weight with a more focused beverage-centric portfolio, anchored in coffee systems, flavored sodas and regional powerhouses. While PepsiCo sits firmly in the top tier of the industry with broad international exposure, KDP has carved out a differentiated niche in North America, targeting profitable growth segments with agility.
The face-off between these two players is not just about who sells more drinks; it is about the dynamics of scale versus specialization, global reach versus regional dominance, and how each company positions itself in a marketplace that is increasingly shaped by evolving consumer tastes and competitive pressures.
The Case for PEP
PepsiCo stands out as a consumer goods leader with unmatched scale, a diverse portfolio, and market share strength. In 2024, its international business generated $37 billion, or 40% of total revenues, highlighting its global reach and resilience. The company continues to gain share across multiple categories, from carbonated soft drinks and hydration to savory snacks, with Pepsi Zero Sugar delivering double-digit growth and Sun Chips ranked as the #1 permissible salty snack brand year to date.
Anchored by iconic names such as Lay’s, Doritos, Gatorade, Quaker and Pepsi, PepsiCo commands a powerful position across demographics and channels, making it one of the most influential players in the global consumer staples industry.
A central pillar of PepsiCo’s strategy is innovation. The company is actively reshaping its portfolio to align with evolving consumer preferences, scaling categories like zero-sugar beverages, functional hydration, and better-for-you snacks, while advancing cleaner labels across Lay’s, Tostitos and Quaker. The acquisition of poppi, a fast-growing prebiotic soda, expands PepsiCo’s appeal with younger consumers and strengthens its foothold in modern wellness-driven beverage trends.
At the same time, PepsiCo is embracing digital transformation, automation and analytics to sharpen pricing, enhance supply-chain productivity, and deliver greater marketplace execution, fueling sustainable long-term growth. PepsiCo also remains disciplined and shareholder-friendly. Despite inflationary pressures and supply-chain challenges, it has delivered margin expansion and organic revenue growth, while reaffirming its low-single-digit growth outlook for 2025.
PEP expects to return $8.6 billion to shareholders in 2025 through dividends and buybacks, underscoring its defensive stability. With global scale, relentless innovation and resilient financial performance, PepsiCo offers a compelling case as both a growth and income-generating investment.
The Case for KDP
Keurig continues to cement its position as a formidable player in the North American beverage market, combining strength in core carbonated soft drinks with rapid expansion into high-growth categories. In second-quarter 2025, net sales grew 7%, led by an 11% increase in U.S. Refreshment Beverages and 6% growth in International.
Flagship Dr Pepper delivered its ninth consecutive year of market share gains, while the energy portfolio, anchored by GHOST, C4, Bloom and Black Rifle, has rapidly scaled to a 7% share of the $26-billion energy market, up from less than 1% just a few years ago. However, the gross margin contracted by 110 basis points, reflecting persistent inflation and tariff-related pressures, signaling that top-line gains are not fully translating into margin expansion.
Innovation remains central to KDP’s growth playbook, with Electrolit in sports hydration posting 30% retail sales growth and launches such as Bloom Pop tapping into prebiotic and gut-health trends. The acquisition of Dyla Brands extends KDP into the growing drink mix and enhancer category, while its coffee segment is supported by new brewers like K-Mini-Mate and the upcoming premium K-Crema.
However, the U.S. Coffee business remains a drag, with second-quarter sales declines due to retailer inventory tightening, commodity inflation, and tariffs on green coffee, which are expected to intensify in the second half.
KDP delivered 7% operating income growth and double-digit EPS gains, supported by disciplined SG&A management. The free cash flow reached $325 million, enabling reinvestment and shareholder returns. Even so, management cautions that rising tariffs, inflationary headwinds and costlier hedges will pressure margins in the back half of 2025. For investors, KDP offers a compelling mix of core stability and high-growth adjacencies, but near-term risks around input costs, tariffs and coffee softness temper the upside, requiring patience for its long-term growth thesis to play out.
Price Performance & Valuation of PEP & KDP
In the past three months, shares of PepsiCo have shown a recovery on strong second-quarter 2025 results and encouraging guidance. International growth stayed robust, while North America improved execution and competitiveness. Looking ahead, PepsiCo targets portfolio innovation, cost optimization and market share gains, reaffirming organic revenue growth guidance and expecting a stronger EPS outlook, aided by easing foreign exchange pressures.
PEP shares have rallied 16.9% in the past three months, whereas the KDP stock has risen 4.7%.
Image Source: Zacks Investment Research
From a valuation perspective, PepsiCo currently trades at a forward price-to-earnings (P/E) multiple of 18.38X, higher than Keurig’s 16.51X. On the surface, this may suggest that Keurig is more attractively priced.
Image Source: Zacks Investment Research
However, a lower valuation does not automatically signal a buying opportunity; it can also reflect underlying concerns about growth prospects or operational challenges. The key question for investors is whether this discount represents untapped value or signals potential headwinds ahead for the stock.
Then again, PepsiCo’s valuation appears rich, but for good reason. Its premium valuation reflects its strong global market share, diversified portfolio, pricing power and reliable dividends, underscoring its defensive appeal. However, the multiple appears expensive versus peers, suggesting much of its stability and growth is priced in, with upside hinging on sustained volume recovery and margin expansion.
How Does Zacks Consensus Estimate Compare for PEP & KDP?
PepsiCo’s EPS estimates for 2025 and 2026 moved up 0.6% and 0.7%, respectively, in the last 30 days. PEP’s 2025 revenues are projected to rise 1.3% year over year to $93.1 billion, and EPS is expected to decline 1.8% year over year to $8.01.
Image Source: Zacks Investment Research
Keurig’s EPS estimates for 2025 and 2026 have moved up by a penny each in the past 30 days. KDP’s 2025 revenues and EPS are expected to increase 6.1% and 6.8% year over year, respectively, to $16.3 billion and $2.05 per share.
Image Source: Zacks Investment Research
PEP vs. KDP: The Verdict
Both PepsiCo and Keurig bring strong credentials to the table, but PepsiCo currently appears better-positioned. PEP’s recent share price recovery reflects confidence in the company’s stronger execution in North America, combined with steady international momentum. Analysts have shown greater optimism toward PepsiCo, revising their expectations upward as the company sharpens its strategy and accelerates portfolio innovation.
While its premium valuation may look expensive compared with peers, it signals investor willingness to pay for its scale, brand strength and consistent shareholder returns. Recent price momentum further reinforces this optimism, suggesting belief in its ability to sustain growth despite cost and competitive pressures. Looking ahead, PepsiCo’s focus on reshaping its portfolio around health-conscious trends, advancing digital capabilities and driving efficiency through cost optimization leaves it well-positioned to defend its leadership and deliver attractive long-term value in an evolving global beverage market.
Image: Bigstock
PepsiCo vs. Keurig: Which Beverage Giant Is a Refreshing Pick?
Key Takeaways
In the sparkling world of beverages, few rivalries capture investor attention like PepsiCo Inc. (PEP - Free Report) and Keurig Dr Pepper Inc. (KDP - Free Report) . Both companies command strong positions in the global refreshment market, but they operate from distinct platforms of scale, strategy and product reach.
PepsiCo, a household giant with a sprawling portfolio spanning carbonated drinks, snacks and nutrition-focused brands, leverages its global distribution muscle and diverse product mix to defend its market share against both traditional rivals and rising health-conscious challengers. Keurig, in contrast, punches above its weight with a more focused beverage-centric portfolio, anchored in coffee systems, flavored sodas and regional powerhouses. While PepsiCo sits firmly in the top tier of the industry with broad international exposure, KDP has carved out a differentiated niche in North America, targeting profitable growth segments with agility.
The face-off between these two players is not just about who sells more drinks; it is about the dynamics of scale versus specialization, global reach versus regional dominance, and how each company positions itself in a marketplace that is increasingly shaped by evolving consumer tastes and competitive pressures.
The Case for PEP
PepsiCo stands out as a consumer goods leader with unmatched scale, a diverse portfolio, and market share strength. In 2024, its international business generated $37 billion, or 40% of total revenues, highlighting its global reach and resilience. The company continues to gain share across multiple categories, from carbonated soft drinks and hydration to savory snacks, with Pepsi Zero Sugar delivering double-digit growth and Sun Chips ranked as the #1 permissible salty snack brand year to date.
Anchored by iconic names such as Lay’s, Doritos, Gatorade, Quaker and Pepsi, PepsiCo commands a powerful position across demographics and channels, making it one of the most influential players in the global consumer staples industry.
A central pillar of PepsiCo’s strategy is innovation. The company is actively reshaping its portfolio to align with evolving consumer preferences, scaling categories like zero-sugar beverages, functional hydration, and better-for-you snacks, while advancing cleaner labels across Lay’s, Tostitos and Quaker. The acquisition of poppi, a fast-growing prebiotic soda, expands PepsiCo’s appeal with younger consumers and strengthens its foothold in modern wellness-driven beverage trends.
At the same time, PepsiCo is embracing digital transformation, automation and analytics to sharpen pricing, enhance supply-chain productivity, and deliver greater marketplace execution, fueling sustainable long-term growth. PepsiCo also remains disciplined and shareholder-friendly. Despite inflationary pressures and supply-chain challenges, it has delivered margin expansion and organic revenue growth, while reaffirming its low-single-digit growth outlook for 2025.
PEP expects to return $8.6 billion to shareholders in 2025 through dividends and buybacks, underscoring its defensive stability. With global scale, relentless innovation and resilient financial performance, PepsiCo offers a compelling case as both a growth and income-generating investment.
The Case for KDP
Keurig continues to cement its position as a formidable player in the North American beverage market, combining strength in core carbonated soft drinks with rapid expansion into high-growth categories. In second-quarter 2025, net sales grew 7%, led by an 11% increase in U.S. Refreshment Beverages and 6% growth in International.
Flagship Dr Pepper delivered its ninth consecutive year of market share gains, while the energy portfolio, anchored by GHOST, C4, Bloom and Black Rifle, has rapidly scaled to a 7% share of the $26-billion energy market, up from less than 1% just a few years ago. However, the gross margin contracted by 110 basis points, reflecting persistent inflation and tariff-related pressures, signaling that top-line gains are not fully translating into margin expansion.
Innovation remains central to KDP’s growth playbook, with Electrolit in sports hydration posting 30% retail sales growth and launches such as Bloom Pop tapping into prebiotic and gut-health trends. The acquisition of Dyla Brands extends KDP into the growing drink mix and enhancer category, while its coffee segment is supported by new brewers like K-Mini-Mate and the upcoming premium K-Crema.
However, the U.S. Coffee business remains a drag, with second-quarter sales declines due to retailer inventory tightening, commodity inflation, and tariffs on green coffee, which are expected to intensify in the second half.
KDP delivered 7% operating income growth and double-digit EPS gains, supported by disciplined SG&A management. The free cash flow reached $325 million, enabling reinvestment and shareholder returns. Even so, management cautions that rising tariffs, inflationary headwinds and costlier hedges will pressure margins in the back half of 2025. For investors, KDP offers a compelling mix of core stability and high-growth adjacencies, but near-term risks around input costs, tariffs and coffee softness temper the upside, requiring patience for its long-term growth thesis to play out.
Price Performance & Valuation of PEP & KDP
In the past three months, shares of PepsiCo have shown a recovery on strong second-quarter 2025 results and encouraging guidance. International growth stayed robust, while North America improved execution and competitiveness. Looking ahead, PepsiCo targets portfolio innovation, cost optimization and market share gains, reaffirming organic revenue growth guidance and expecting a stronger EPS outlook, aided by easing foreign exchange pressures.
PEP shares have rallied 16.9% in the past three months, whereas the KDP stock has risen 4.7%.
Image Source: Zacks Investment Research
From a valuation perspective, PepsiCo currently trades at a forward price-to-earnings (P/E) multiple of 18.38X, higher than Keurig’s 16.51X. On the surface, this may suggest that Keurig is more attractively priced.
Image Source: Zacks Investment Research
However, a lower valuation does not automatically signal a buying opportunity; it can also reflect underlying concerns about growth prospects or operational challenges. The key question for investors is whether this discount represents untapped value or signals potential headwinds ahead for the stock.
Then again, PepsiCo’s valuation appears rich, but for good reason. Its premium valuation reflects its strong global market share, diversified portfolio, pricing power and reliable dividends, underscoring its defensive appeal. However, the multiple appears expensive versus peers, suggesting much of its stability and growth is priced in, with upside hinging on sustained volume recovery and margin expansion.
How Does Zacks Consensus Estimate Compare for PEP & KDP?
PepsiCo’s EPS estimates for 2025 and 2026 moved up 0.6% and 0.7%, respectively, in the last 30 days. PEP’s 2025 revenues are projected to rise 1.3% year over year to $93.1 billion, and EPS is expected to decline 1.8% year over year to $8.01.
Image Source: Zacks Investment Research
Keurig’s EPS estimates for 2025 and 2026 have moved up by a penny each in the past 30 days. KDP’s 2025 revenues and EPS are expected to increase 6.1% and 6.8% year over year, respectively, to $16.3 billion and $2.05 per share.
Image Source: Zacks Investment Research
PEP vs. KDP: The Verdict
Both PepsiCo and Keurig bring strong credentials to the table, but PepsiCo currently appears better-positioned. PEP’s recent share price recovery reflects confidence in the company’s stronger execution in North America, combined with steady international momentum. Analysts have shown greater optimism toward PepsiCo, revising their expectations upward as the company sharpens its strategy and accelerates portfolio innovation.
While its premium valuation may look expensive compared with peers, it signals investor willingness to pay for its scale, brand strength and consistent shareholder returns. Recent price momentum further reinforces this optimism, suggesting belief in its ability to sustain growth despite cost and competitive pressures. Looking ahead, PepsiCo’s focus on reshaping its portfolio around health-conscious trends, advancing digital capabilities and driving efficiency through cost optimization leaves it well-positioned to defend its leadership and deliver attractive long-term value in an evolving global beverage market.
Keurig currently carries a Zacks Rank #3 (Hold), while PEP has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.