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Originally Posted by AMSOILGUY
Can someone explain to me looking at these 3 stocks why one would be a better choice over the other? I enjoy all 3 companies drinks and wouldn't have a problem owning any of them. KO, PEP, DPS.
KO=Div/yield .31/2.95 and cost 41.40
DPS=Div/yield .41/2.38 and cost 68.94
PEP=Div/yield .65/2.74 and cost 95.65
All 3 looking at the 5yr start lower on the left and get higher on the right. Are you better off purchasing more of one stock and earning multiple Div or purchasing less stock and earning a higher Div? I'm sure the name of the game is to try and figure out which one is going to do better long term and thats what you should base you choice off of. But lets just say for discussion sake that they are going to continue to perform equally.
Or am I trying to make it to simple?
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When I'm faced with the decision between multiple good choices, this is what I typically default to. I'm in a growth mode with some choices and simply steady eddy with others though. Because dividend payments are based on the number of shares owned, I go for as many shares as I can for a set dollar amount on any stock I'm looking for growth in. I did this when comparing Altria and Phillip Morris. I could get many more shares with the price of Altria at the time. This in turn allowed me to receive many more shares with each dividend payment.
Everyone is going to be different and have different priorities, tolerances, and goals. A good, general rule though is to invest in quality names so that over the long haul, you are comfortable with your choice and make money. With that said, I don't think you'd be making a bad choice investing in any of those choices. You may want to dig a little more into Pepsi though as they do have a large snack food component to them versus purely beverages like Coke and Dr Pepper/Snapple. That may or may not matter to you. I just mention it as it is a differentiator that I doubt most people would know about the company when it's mentioned.