I am trying to educate myself a bit about evaluating companies. I have been finding out about the balance sheet, income statement and cashflow statement. To get a bit of a hang of the metrics that come from these, I am now comparing 2 industry giants: Pepsi and Coca-Cola.
The numbers below are from a 2006 – TTM timeframe. For example: between 2006 and today (TTM), PEP revenue grew 146%:
| PEP | KO | |
|---|---|---|
| Dividend CAGR | 8.34 | 2.08 |
| Dividend Yield | 2.9 | 3.4 |
| MarketCap | 142 | 143 |
| Revenue | 146 | 79 |
| Revenue CAGR | 5.37 | 3.42 |
| Net Income | 41 | 107 |
| FCF | 43 | 109 |
I have a few questions about these numbers:
- PEP seems to be the stronger company, with a revenue that grew a lot more than KO's. However, where PEP net income only grew 41%, KO's grew 107%. What is -generally speaking- the meaning of this? Does it mean that KO is running a much more efficient operation?
- Marketcap of both companies grew basically the same: up ~140% over the last 17 years. But revenue growth of PEP is a lot bigger than KO's. Would that mean that either KO is overvalued right now, or PEP undervalued (compared to one another)?
Leave a Reply