PepsiCo (NASDAQ:PEP) versus Coffee (NASDAQ:JVA) Head-To-Head Contrast

Coffee (NASDAQ:JVA) and PepsiCo (NASDAQ:PEP) are both consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Profitability

This table compares Coffee and PepsiCo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Coffee	1.45%	5.11%	3.36%
PepsiCo	8.77%	57.92%	10.62%

Institutional and Insider Ownership

73.1% of PepsiCo shares are owned by institutional investors. 22.1% of Coffee shares are owned by insiders. Comparatively, 0.1% of PepsiCo shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Coffee and PepsiCo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coffee	0	1	0	0	2.00
PepsiCo	1	11	8	0	2.35

PepsiCo has a consensus price target of $168.50, suggesting a potential upside of 5.69%. Given PepsiCo’s stronger consensus rating and higher probable upside, analysts plainly believe PepsiCo is more favorable than Coffee.

Dividends

Coffee pays an annual dividend of $0.08 per share and has a dividend yield of 2.5%. PepsiCo pays an annual dividend of $5.69 per share and has a dividend yield of 3.6%. Coffee pays out 32.0% of its earnings in the form of a dividend. PepsiCo pays out 94.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PepsiCo has increased its dividend for 54 consecutive years. PepsiCo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Coffee and PepsiCo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coffee	$96.28 million	0.19	$1.40 million	$0.25	12.68
PepsiCo	$93.93 billion	2.32	$8.24 billion	$6.00	26.57

PepsiCo has higher revenue and earnings than Coffee. Coffee is trading at a lower price-to-earnings ratio than PepsiCo, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Coffee has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, PepsiCo has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Summary

PepsiCo beats Coffee on 14 of the 17 factors compared between the two stocks.

About Coffee

Coffee Holding Co., Inc. engages in manufacturing, roasting, packaging, marketing, and distributing roasted and blended coffees in the United States, Australia, Canada, England, and China. It offers wholesale green coffee products, including unroasted raw beans that are sold to large, medium, and small roasters, as well as coffee shop operators; and roasts, blends, packages, and sells coffee under private labels in cans, brick packages, and instants of various sizes. The company also roasts and blends company label branded coffee to supermarkets, wholesalers, and individually owned stores; and sells tabletop coffee roasting equipment, instant coffees, and tea products for its customers. Its coffee brands include Cafe Caribe, Don Manuel, S&W, Cafe Supremo, Via Roma, Premier Roasters, and Harmony Bay. The company was formerly known as Transpacific International Group Corp and changed its name to Coffee Holding Co., Inc. in April 1998. Coffee Holding Co., Inc. was founded in 1971 and is headquartered in Staten Island, New York.

About PepsiCo

PepsiCo, Inc. engages in the manufacture, marketing, distribution, and sale of various beverages and convenient foods worldwide. The company operates through seven segments: Frito-Lay North America; Quaker Foods North America; PepsiCo Beverages North America; Latin America; Europe; Africa, Middle East and South Asia; and Asia Pacific, Australia and New Zealand and China Region. It provides dips, cheese-flavored snacks, and spreads, as well as corn, potato, and tortilla chips; cereals, rice, pasta, mixes and syrups, granola bars, grits, oatmeal, rice cakes, and side dishes; beverage concentrates, fountain syrups, and finished goods; ready-to-drink tea, coffee, and juices; dairy products; and sparkling water makers and related products, as well as distributes alcoholic beverages under Hard MTN Dew brand. The company offers its products primarily under the Lay’s, Doritos, Fritos, Tostitos, BaiCaoWei, Cheetos, Cap’n Crunch, Life, Pearl Milling Company, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, Rice-A-Roni, Aquafina, Bubly, Emperador, Diet Mountain Dew, Diet Pepsi, Gatorade Zero, Crush, Propel, Dr Pepper, Schweppes, Marias Gamesa, Ruffles, Sabritas, Saladitas, Tostitos, 7UP, Diet 7UP, H2oh!, Manzanita Sol, Mirinda, Pepsi Black, Pepsi Max, San Carlos, Toddy, Walkers, Chipsy, Kurkure, Sasko, Spekko, White Star, Smith’s, Sting, SodaStream, Lubimyj Sad, Agusha, Chudo, Domik v Derevne, Lipton, and other brands. It serves wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, and others through a network of direct-store-delivery, customer warehouse, and distributor networks, as well as directly to consumers through e-commerce platforms and retailers. The company was founded in 1898 and is based in Purchase, New York.