There's a predicament when it comes to investing because the best companies to buy aren't always the ones that investors are buying. Sometimes, emotions get the better of Wall Street, and stocks are bid up to levels that are hard to justify.

At the same time, however, there are companies that seem to be forgotten or outright shunned because of problems that are likely to be temporary. This is why Coca-Cola (KO 0.98%) is a problematic investment today, and its competitor PepsiCo (PEP -0.33%) could be the ultimate growth stock to buy right now.

What do Coca-Cola and PepsiCo do?

Without getting too deep into the details, Coca-Cola and PepsiCo are both consumer staples giants. Coca-Cola is focused on beverages while PepsiCo makes beverages, snacks, and packaged foods.

Each of these companies is large and globally diversified. Each has leading brands. Each has impressive distribution, marketing, and research and development skills. While they aren't interchangeable, per se, their businesses are both quite attractive.

Image source: Getty Images.

That said, Coca-Cola is handily outperforming PepsiCo today, as highlighted by the first-quarter performance of each. Coca-Cola grew organic revenue 6% in the opening stanza of 2025, while PepsiCo's organic revenue growth was only up 1.2%.

KO data by YCharts.

Is Coca-Cola worth buying?

The divergent performance of these two beverage giants has led to a divergent performance for their stocks, too. As the chart above highlights, Coca-Cola's share price is up 15% over the past year while PepsiCo's shares have fallen more than 25%. That's a huge advantage of 40 percentage points for Coca-Cola.

The gains Coke has experienced, meanwhile, have pushed its price-to-sales (P/S) and price-to-earnings ratios (P/E) above their five-year averages. Coca-Cola's 2.8% dividend yield is also near a decade low. PepsiCo's P/S and P/E are below their five-year averages, and its yield, at 4.4%, is near historical highs. From a valuation perspective, Coca-Cola is expensive and PepsiCo is cheap.

If you are a dividend investor or care about valuation, PepsiCo will be the better choice. But what about the poor growth of its business? Even good companies go through difficult periods, as is happening with the company right now.

The interesting thing is that the company is a Dividend King, which requires a business raise its dividend annually for at least 50 consecutive years. That basically calls for a strong game plan that gets executed well in good times and bad. PepsiCo has clearly lived up to that over time, and it seems likely it will do so again this time around.

If you have $1,000 to invest, lean toward PepsiCo

There is clear evidence that PepsiCo is still using its reliable game plan as it works toward a recovery. In 2024, it bought Siete Foods, an on-trend Mexican-American producer of snack and packaged foods. In 2025, it added Poppi, an on-trend probiotic beverage company.

Essentially, PepsiCo is working on updating its portfolio so its products resonate better with consumers. This is how branded consumer-staples makers maintain their relevance over time.

There's no overnight solution for PepsiCo, but history suggests this long-time growth company will eventually get back on track. And while you wait for the return to its more historical performance levels, you can collect an attractive dividend yield from an industry leader and Dividend King.