How Rich Would You Be If You Invested $1,000 In Coca-Cola Or Pepsi-Co 10 Years Ago?
When you think about soda, what comes to your mind first? Whether you’re loyal to Coca Cola or Pepsi, it is true that these two soda giants are fighting to be the world’s most drunk soft drink. Even if Coke definitely wins in this game by setting records in the products sold globally, you have to admit that Pepsi really tries to up their game. In the end they are the second selling soft drink just after legendary Coca-Cola.
It is more than obvious that both companies are super successful and were both included in the Forbes list of the world’s most valuable brands in 2018. But what if you invested $1,000 in some of the two soda companies 10 years ago? Would it make you richer today?
Would You Be Richer Today If You Invested $1,000 in Coca-Cola 10 Years Ago?
If you did this, you would barely notice a difference. The investment in Coca-Cola wouldn’t bring you wealth in 10 years, it seems.
CNBC calculations reveal that if you invested $1,000 in Coca-Cola in 2009, the worth of it would be a bit more than $2,700 after 10 full years.
Would You Be Richer Today If You Invested $1,000 in Pepsi 10 Years Ago?
But would investing the same amount of money in Pepsi 10 years ago give you better results? It doesn’t really seem like it. An investment of $1,000 in Pepsi would today be worth $2,600. That’s only $100 of difference between the two.
So, it seems that Pepsi wouldn’t make you any richer either.
Considering these giants’ success you might wonder how would this be possible? Well, the companies’ stock prices have been quite steady over the years, but still any individual stock can over or underperform. So no future results can be guaranteed.
Also, there’s one thing with soda and Ivan Feinseth of the financial firm Tigress Financial Partners explains what is the problem that soda market is facing. “The biggest problem that Pepsi and similar companies face”, Feinseth said on CNBC’S “Squawk Box”, “is that there is no growth in carbonated soda. The company has to continue to develop or acquire other alternatives: sparkling water, flavored seltzers, flavored teas, sports drinks, recovery drinks. That’s where the growth is, in the niche beverage markets.’
In fact, Pepsi-co and Coca-Cola both offer products other than soda. They both continue to buy different beverage brands and snacks brands in order to diversify types of products they own.
You might have missed it, but Pepsi-co owns the popular snack brands Cheetos, Doritos and Lays, but not only, Gatorade and Lipton are also among beverage brands owned by them.
On the other hand, Coca-Cola still continues with new acquisitions. They bought the coffee chain Costa Coffee, but that doesn’t mean the company will keep up the pace in 2019. The company will rather “absorb” the investments from the last year. Chief executive officer James Quincey said at the 49th World Economic Forum in Davos that he is expecting little less growth and tailwind in 2019 and he announced that this year might be a bit tougher in the macroeconomic field.
So, should you invest in Coca-Cola or Pepsi-co?
“Mad Money” host Jim Cramer thinks it’s a good idea. Here’s why. He said that stocks like Coca-Cola and Pepsi-co will go well even during a potential recession. If a stock market crash was to happen, these stocks would definitely be the safest ones to own. Stocks of these companies are also supported by lower raw costs.
But, since it seems like we’re not getting into a recession, investing in these soda companies might not be the best idea if you’re looking for a quicker way to earn more money.
Instead, and especially if you’re investing for the first time, experts in investing such as Mark Cuban, Tony Robbins and Buffett suggest starting with index funds. They offer low turnover rates, attendant fees and tax bills. Additionally, they fluctuate with the market to remove the risk of picking individual stocks.