HomeMost PopularInvestingWhich Is A Better Beverage Pick – Coca-Cola Stock Or Monster Beverage

Which Is A Better Beverage Pick – Coca-Cola Stock Or Monster Beverage

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Introduction

In the world of beverages, investors may wonder which is the better pick between Coca-Cola (NYSE: KO) and Monster Beverage (NYSE: MNST). While Coca-Cola has a 19% stake in Monster Beverage, there are several factors to consider when comparing the two stocks.

Valuation and Revenue Growth

Coca-Cola trades at a lower valuation of 5.7x revenues compared to Monster Beverage’s 8.7x. Monster Beverage has seen superior revenue growth, with an average annual growth rate of 14.6% in the last three years compared to Coca-Cola’s 5.6%. Additionally, Monster Beverage has benefited from strong demand for its energy drinks and successful international expansion.

Profitability and Financial Position

In terms of profitability, Coca-Cola has a reported operating margin of 28.8% in 2022, while Monster Beverage’s operating margin stands at 25.1%. However, Monster Beverage has a stronger financial position, with 35% cash as a percentage of assets, compared to Coca-Cola’s 14%. Monster Beverage is also a debt-free company.

Stock Performance and Future Outlook

Monster Beverage has outperformed Coca-Cola and the S&P 500 this year, with a 120% return. Looking ahead, Coca-Cola is expected to offer higher returns over the next three years due to its comparative valuation and potential for expanded P/S multiple. Coca-Cola’s stock currently trades at 5.7x sales, while Monster Beverage’s stock trades at 8.7x revenues.

Conclusion

While Monster Beverage has shown better revenue growth and financial position, Coca-Cola is more profitable and offers a lower valuation. Based on these factors, it is expected that Coca-Cola will outperform Monster Beverage in the next three years. Investors should consider these findings when making their investment decisions.

Sources

Coca-Cola stock on Trefis
Monster Beverage stock on Trefis

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