Investing 102

[toy71camaro]

Great article, totally re-iterates what's been said here...

long term, growth staple companies who pay decent dividends.

i think i heard that before some where?

[toy71camaro]

Ok, here is one i'd like to open for discussion....

Pepsi Vs Coke. (the grand ole debate) but not about flavor! hah

Looking at their current info, they are nearly the same price, dividend is +0.35% in Pepsi's favor.

Total return:
Pep: 3.6%/34.3%/12.6%
KO: 12.4%/87.7%/73.3%

So, going out to the 5yr mark, looks like Coke is the clear total growth winner... but, looking at the 10 yr mark (which, i dont see Schwab has that graph):

Since 1999:
Pep: 87%
KO: 28.7%

The 10 yr charts between the two show that Coke had a very rough patch from 2000 to 2010 when they finally "broke" above their 1999 price.

That seems to me, that PEP, while doesnt have the current growth KO has over the past 5 years, they seem to be much more stable, and more "heading in the right direction".

Whats the census say?

[toy71camaro]

I guess... to somewhat answer my own question...

Perhaps Coke would be "better buy"... for those handful of years, we got our dividends still, and were purchasing shares at a discount. Eventually it "came back up", and now we have more shares when it came around = more money in our account.

then, the next question to answer (myself, not meaning you guys)... is to try and guess which one is going to be the "better guy" the next 10, 20 years.

Both being fairly solid in the past (PEP being a bit more "stable", but, stable can also = less shares = less money), they'll probably end up nearly the same in the end. hah.

[GregWeld]

Originally Posted by toy71camaro

I guess... to somewhat answer my own question...

Perhaps Coke would be "better buy"... for those handful of years, we got our dividends still, and were purchasing shares at a discount. Eventually it "came back up", and now we have more shares when it came around = more money in our account.

then, the next question to answer (myself, not meaning you guys)... is to try and guess which one is going to be the "better guy" the next 10, 20 years.

Both being fairly solid in the past (PEP being a bit more "stable", but, stable can also = less shares = less money), they'll probably end up nearly the same in the end. hah.

These kinds of questions are the constant struggle in "investing".... and they really have no answer because nobody has the crystal ball. We can study numbers 'til our brains run out our ears... but that is all in the past.

SO -- I've said it here before. When it comes down to this... PICK THE ONE YOU LIKE. Do ya drink Coke or Pepsi? Choose one. If you have the dough - put some in BOTH. Cause you're not going to be far off the mark with either one IMHO.

Remember that we can manipulate numbers in any way we want... which period of time... EBITDA... P/E.... and blah blah blah. The important lessons of Investing 102 are -- DO SOMETHING... and if that something includes some basic research -- which you just did (and showed it here)... then the final "right answer" is to pick the stock that YOU want to own and feel good about.

[GregWeld]

Personally I own 3000 shares of Coke (KO).... I don't drink either brand - I'm a coffee freak. LOL

When I looked at all the numbers - I just like the Coke brand. No right or wrong choice here. And basically what you're buying here is a steady eddy.

[CRCRFT78]

Just my take on the KO vs. PEP debate. I ended up going with Pepsi but I also plan to invest in Coke. Although the numbers are comparable and close I liked the fact that Pepsi also has a hand in the snack food business. Most people will buy a snack to go with their soda when they are on the go. Hopefully that snack company is owned by Pepsi when doing so. I felt that was just another aspect of their business model that could possibly help the stock when soda sales sit idle. I worked in the beverage industry for 8 years and remembered what it was like when I saw salesman supplement their lack of soda sales with other company owned products.

Right or wrong, it got me to think outside the box and look at Pepsi as more than a soda company and consider what may or may not help the business during down times. Not to say that Coke couldn't do the same, it was just another factor to consider along with all the charts.

[toy71camaro]

Awesome guys.. Thanks for the tips..

I know there wasnt necessarily a "right or wrong" answer.. thats not really what i was aiming for...

I was more trying to just compare apples to apples, and see what other "strategies" people might come up with to base their purchases on... Greg pointed out one "buy what you like" (and yes, i didnt put it, but I'm a PEP drinker when i do drink soda, so i would of likely went that way regardless)... but i also wanted to see any other ideas... Such as CRCRFT78 mentioned, thiking "outside" the box, and that PEP is also involved in more things than just "soda". Thanks for pointing that out, I didnt think to consider that.

Another mental note for me.. aside from the "bulk of the business, consider what "else" they "do" that could supplement their business". perhaps thats why PEP didnt have the large dip that coke had. Soda may have slowed, but snacks may have picked up, and vice versa.

I love "thinking out loud" like this.. sorry if i seem to babble a lot. LOL