Comparing PepsiCo (NASDAQ:PEP) and Primo Brands (NYSE:PRMB)

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

Volatility and Risk

PepsiCo has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Primo Brands has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PepsiCo	$91.85 billion	2.18	$9.58 billion	$5.26	27.81
Primo Brands	$5.15 billion	1.35	-$16.40 million	($0.31)	-60.44

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

Institutional & Insider Ownership

73.1% of PepsiCo shares are held by institutional investors. Comparatively, 87.7% of Primo Brands shares are held by institutional investors. 0.1% of PepsiCo shares are held by insiders. Comparatively, 58.4% of Primo Brands shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares PepsiCo and Primo Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PepsiCo	7.82%	57.58%	10.43%
Primo Brands	-1.30%	12.52%	3.73%

Dividends

PepsiCo pays an annual dividend of $5.69 per share and has a dividend yield of 3.9%. Primo Brands pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. PepsiCo pays out 108.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Primo Brands pays out -129.0% of its earnings in the form of a dividend. 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.

Analyst Ratings

This is a summary of current ratings for PepsiCo and Primo Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PepsiCo	1	10	10	0	2.43
Primo Brands	2	3	8	0	2.46

PepsiCo currently has a consensus price target of $161.32, indicating a potential upside of 10.29%. Primo Brands has a consensus price target of $26.09, indicating a potential upside of 39.26%. Given Primo Brands’ stronger consensus rating and higher possible upside, analysts plainly believe Primo Brands is more favorable than PepsiCo.

Summary

PepsiCo beats Primo Brands on 11 of the 17 factors compared between the two stocks.

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.

About Primo Brands

Primo Brands Corp. is a branded beverage company, which focuses on healthy hydration. It delivers sustainably and domestically sourced diversified offerings across products, formats, channels, price points and consumer occasions, distributed in the United States and Canada. The company provides water filtration units for home and business consumers across North America. It also offers reusable packaging, helping to reduce waste through its reusable, multi-serve bottles and innovative brand packaging portfolio, which includes recycled plastic, aluminum and glass. Primo Brands was founded in 2024 and is headquartered in Tampa, FL.