Growing investor optimism in the defensive beverage industry amid a volatile market backdrop should enable underlying stocks to witness a surge this holiday season. Therefore, popular beverage stocks PepsiCo (NASDAQ:PEP) and Keurig Dr Pepper (NASDAQ:KDP) have enough upside potential to deliver solid returns, dodging the market fluctuations caused by rising COVID-19 cases and high inflation. But which of these stocks is a better buy now? Read more to find out.PepsiCo, Inc. (PEP) and Keurig Dr Pepper Inc. (KDP) are two prominent players in the non-alcoholic beverage industry. PEP operates food, beverage, and snack businesses worldwide. It markets its products through a network of direct-store-delivery, customer warehouse, distributor networks, and e-commerce platforms and retailers. On the other hand, KDP manufactures and distributes soft drinks, juices, teas, mixers, water, and other beverages to retailers, bottlers and distributors, restaurants, hotel chains, office coffee distributors, and end-use consumers.
Beverage companies are working toward introducing new products to meet the growing demand for healthy, refreshing, and ready-to-drink beverages. The non-alcoholic beverages market is expected to grow at an 8.2% CAGR and reach $1.73 trillion by 2028. Moreover, renowned beverage stocks are likely to witness increasing investor attention amid the immense volatility in the markets. So, both PEP and KDP are expected to benefit.
While KDP gained marginally over the past month, PEP has surged 5.2%. PEP is a clear winner with 28.2% gains versus KDP’s 4.7% in terms of their past nine months’ performance. But which of these stocks is a better pick now? Let us find out.