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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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If we are assuming they are going to perform equally, it would not matter which stock you choose.
Depending on your situation you may prefer a stock that pays a higher dividend which could help you narrow your selection. You may also want to compare earnings and revenue growth, as well as the dividend growth rate. I will tell you this about the three stocks you have selected. You will pay a premium for KO for its brand strength, long term history, etc. That is not necessarily a bad thing, because sometimes it does make sense to own the best. It may be the more conservative choice, for which you get a slightly lower return (risk/reward).