Coke (KO) and Pepsi (PEP): Soft Drinks In A Soft Economy
Coca-Cola (KO) and Pepsi (PEP) keep making new highs. Yesterday, Coke hit $57.33, a few pennies from its 52-week peak. At $72.62, the same is true of Pepsi (PEP). So far this year, both companies have out-performed the market by…
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Coca-Cola (KO) and Pepsi (PEP) keep making new highs. Yesterday, Coke hit $57.33, a few pennies from its 52-week peak. At $72.62, the same is true of Pepsi (PEP). So far this year, both companies have out-performed the market by wide margins.
Conventional wisdom is that the companies are now diversified. They have a large portion of their business overseas. But, the have real headwinds. Commodities prices are rising. Soft drinks are not the medical community’s No.1 suggestion for a healthy diet.
No, the stocks are doing well for the same reason that McDonald’s (MCD) is. People can always afford a can of Coke. Even when making the mortgage payments is tough.
As the economy contracts, Coke and Pepsi are signature businesses for the kind of operation that will not get hurt. What they sell is inexpensive, and almost everyone likes it.
Douglas A. McIntyre
Contact [email protected] for any questions or corrections.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
