Tuesday, October 8, 2013

Dividend Compass Cup Match 1 - Coca Cola vs Pepsi

Humans face many metaphysical questions - why are we here? What is the meaning of life? Also: Coke or Pepsi?

In this first match of the Dividend Compass Cup, we'll attempt to answer the latter.

The rules are straightforward, we run the two quality, wide moat companies through the Dividend Compass to analyze which is the more interesting investing candidate. 

It's a great first match - Coca Cola (KO) and Pepsi (PEP) have two of the all time great dividend records. Coca Cola has paid quarterly dividends since 1920 and increased its dividend for the last fifty years. Pepsi is no slouch, having increased its dividend 41 years straight.

First up, Coca Cola. as you would expect the metrics look solid:

This is good for a 4 point plus score each year from the Dividend Compass and a 4.19 five year average score for Coca Cola:  


That 4.19 five year average score will be tough to beat, let's see how Pepsi does.

The FCF Cover and Return on Equity are currently better than Coca Cola, however the 5 year Average Score is good but not quite good enough to beat Coca Cola


So the winner of the first match is Coca Cola, Pepsi puts up a tough fight certainly good enough to beat most other companies, but Coca Cola's consistency and never coming in under 4 points over five years are good enough to put them through to the next round.

Here is the current bracket.


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