<div id="readability-page-1"><div id="blog-content"><img height="300" src="https://imageproxy.pbkrs.com/https://cdn.pixabay.com/photo/2019/04/28/12/26/cans-4163012_960_720.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="600" original-src="https://imageproxy.pbkrs.com/https://cdn.pixabay.com/photo/2019/04/28/12/26/cans-4163012_960_720.jpg"/>Image Source: Pixabay With the broader stock market indexes near all-time highs, investors may be seeking defensive options for their portfolios as we begin 2026.Coca-Cola (KO - Free Report) and Pepsi (PEP - Free Report) are two defensive stocks that are usually of interest and tend to perform well during market corrections, as consumers buy food and beverages regardless of economic conditions.Their defensive nature and reliable dividends often make Coca-Cola and Pepsi stock of interest to both retail and institutional investors. Institutional ownership currently accounts for 64% of Coca-Cola stock and 75% of Pepsi shares, making them stable investments that are typically less prone to volatility.<h3> ROIC Comparison </h3>Coca-Cola has the higher return on invested capital (ROIC) percentage of 18% despite Pepsi’s expansion into food and snack products, such as its Frito-Lay and Quaker Foods brands.Although Coca-Cola has kept its focus on beverages, its ROIC has seen a nice uptick toward the often admirable level of 20% or higher, illustrating a keen ability to return invested capital into profits.(Invested capital represents the total amount of money a company raises, through equity and debt, to fund its operations and long-term growth) <img src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/2b/140550.jpg/query-dj0xNTkxODE1MDQ0?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="355" original-src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/2b/140550.jpg/query-dj0xNTkxODE1MDQ0"/> Image Source: Zacks Investment Research Meanwhile, Pepsi’s ROIC is at a respectable 14% and still suggests long-term shareholder value, but has declined in recent quarters. <img src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/36/140551.jpg/query-dj0yNjQ3NTMzNDk?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="356" original-src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/36/140551.jpg/query-dj0yNjQ3NTMzNDk"/> Image Source: Zacks Investment Research<h3> Tracking Coca-Cola &amp; Pepsi’s Outlook </h3>Coca-Cola is now thought to have ended fiscal 2025 with annual earnings rising 3% to $2.98 per share, and FY26 EPS is projected to rise another 8% to $3.22. This comes as Coca-Cola’s sales are expected to be up 3% for FY25 and are projected to increase another 5% this year to $51.01 billion. Coca-Cola will be reporting its Q4 2025 results on February 10. <img src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/cb/140552.jpg/query-dj04MzM2MDk4Ng?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="672" original-src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/cb/140552.jpg/query-dj04MzM2MDk4Ng"/> Image Source: Zacks Investment Research Pivoting to Pepsi, FY25 EPS is expected to slightly dip to $8.12 compared to $8.16 in 2024. That said, FY26 EPS is projected to rebound and rise 5% to $8.55. Pepsi’s sales are expected to be up 2% for FY25 and are projected to increase another 4% in FY26 to $97.07 billion. Pepsi reports Q4 2025 results on February 3. <img src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/32/140553.jpg/query-dj00NzQwNzY1ODA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="693" original-src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/32/140553.jpg/query-dj00NzQwNzY1ODA"/> Image Source: Zacks Investment Research<h3> Valuation &amp; Dividend Comparison </h3>Magnifying Pepsi’s more robust financial figures is that PEP trades at 16X forward earnings and near the preferred level of less than 2X forward sales. Pepsi’s valuation ratios are roughly on par with the Zacks Beverages-Soft drinks Industry average, which includes other notable companies such as Moster Beverage (MNST - Free Report) and Keurig Dr Pepper (KDP - Free Report).On the other hand, Coca-Cola is trading at a noticeable premium, especially in terms of price to forward sales at 6X. <img src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/51/140554.jpg/query-dj0xMjgyNzAwNjY5?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="164" original-src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/51/140554.jpg/query-dj0xMjgyNzAwNjY5"/> Image Source: Zacks Investment Research Coca-Cola’s 3% annual dividend yield is in line with the industry average, but Pepsi has the edge here as well at 4%. Classified as “Dividend Kings”, Coca-Cola and Pepsi have increased their dividends for more than 50 consecutive years, at 63 years and 53 years, respectively. <img src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/e0/140555.jpg/query-dj0xOTM3NTUzMjM4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="620" height="164" original-src="https://imageproxy.pbkrs.com/https://staticx-tuner.zacks.com/images/articles/charts/e0/140555.jpg/query-dj0xOTM3NTUzMjM4"/> Image Source: Zacks Investment Research<h3> Summary &amp; Conclusion </h3>As we begin 2026, Pepsi stock checks more of the boxes that investors may be looking for, despite Coca-Cola’s more promising return on invested capital. Although both consumer staples stocks are known for their defensive prowess and may attract investors with the broader indexes near all-time highs, Coca-Cola shares could be more susceptible to short-term weakness given its valuation relative to Pepsi and their beverage peers. <hr/>More By This Author:Chevron Highlights Stocks To Consider If Venezuela's Oil Industry Is Revived Is Southern Copper Corporation Poised For A Major Copper Production Upswing This Decade? After A 58% Run In 2025, Is Caterpillar Stock Still A Buy In 2026? </div></div>

Coca-Cola and Pepsi are two defensive stocks appealing to investors as 2026 approaches. Coca-Cola boasts a higher return on invested capital (ROIC) of 18%, while Pepsi's ROIC is 14%. Coca-Cola's earnings per share (EPS) is projected to rise 8% to $3.22 in FY26, while Pepsi's EPS is expected to rebound 5% to $8.55. Pepsi offers a higher dividend yield of 4% compared to Coca-Cola's 3%. Despite Coca-Cola's strong ROIC, Pepsi may be the better investment due to its valuation and financial stability as market conditions remain uncertain.

- With the stock market near all-time highs, investors are considering defensive options like Coca-Cola and Pepsi, known for stability during downturns.  
- Coca-Cola boasts a higher return on invested capital at 18% compared to Pepsi's 14%, while both companies project earnings growth for fiscal 2026.  
- Pepsi, with a 4% dividend yield and solid sales expectations, seems attractive despite Coca-Cola's strong fundamentals, which may lead to vulnerability due to its higher valuation.

Coca-Cola Vs Pepsi Stock: Which Is The Better Investment For 2026?