This is the place where Pepsi is beating Coke.
When it comes Pepsi vs Coke, you can only choose one side. Many people still prefer to drink Coke as it continues to be the soft drinks market leader.
But on Wall Street it’s an entirely different story as Pepsi outperformed Coke for the past few years. This trend is not looking to end anytime soon.
Pepsi just reported sales and earnings that topped forecasts Thursday and It boosted its outlook as well.
Pepsi (PEP) stock rose 1.5% on the news. The stock is now up nearly 10% this year. Meanwhile, it rival Coke's stock is down 2%.
If Pepsi's stock continues to rally, it may not be long before the company winds up being worth more than Coke as well.
Pepsi's market value is currently more than $155 billion, about $25 billion less than what Coke is worth.
Pepsi briefly topped Coke's market value in the mid-late 2000s. But Coke has historically held a pretty large lead over its top rival. It looks like that may not last forever.
Both Coke and Pepsi are trying to adapt to changing consumer tastes. Pepsi is trying to appeal to Millennial and Gen X nostalgia with the reintroduction of its Crystal Pepsi clear soda.
At the same time, both are struggling with its diet beverages as they are falling out of favor. Mainly because consumers have gotten use to the idea that diet sodas aren't exactly healthy given the chemicals that are in them.
As a result, carbonated beverages are losing ground to energy beverages, juices and water.
Coke and Pepsi each have a presence in markets. Coke owns Minute Maid, Dasani and Powerade. It is also the largest shareholder of Monster Beverage. And Pepsi owns Tropicana, Aquafina and Gatorade.
But Pepsi also has some very popular snacks, a growth area that has allowed the company to outpace Coke. Pepsi's Frito-Lay division, which includes Fritos and Lay's brands of chips, Doritos, Cheetos and Cracker Jack, is reporting solid growth in sales and earnings as of late.
The profit margins for Pepsi's food business are extremely appetizing to investors. Even though Frito-Lay accounts for just a little more than 20% of the company's overall sales, the division makes up more than 40% of Pepsi's operating profits.
Interestingly, consumers still seem to love salty snacks even though they may be drinking more water and energy drinks and less soda.
So can Pepsi continue to profit from consumers' love of junk food? Our guess is yes.
