Up 35%, How Long Can Coca-Cola Continue Crushing the S&P 500?

• Coca-Cola stock is up 35% in 2026, its best year since 1996, beating the S&P 500's 14%. • PepsiCo trades at a lower P/E (17 vs. 29) and offers a higher dividend yield (4.2% vs. 2.2%). • Both are Dividend Kings, but PepsiCo's improving growth and valuation gap make it the better buy now. Coca-Cola (NYSE: KO) has had a standout year, delivering 35% total returns versus the S&P 500's 14% — its best performance since 1996. That's unusual for a mature, slow-growing company. But Coca-Cola's momentum may face a challenge from rival PepsiCo, whose stock has actually fallen about 3% in 2026. Despite that weak share performance, PepsiCo looks like the more attractive investment on several fronts. PepsiCo struggled with flat revenue for years as consumer preferences shifted, but began recovering in fiscal 2025 after cutting prices and adding healthier ingredients. Its latest quarterly revenue grew 6%, nearly matching Coca-Cola's 7% — not enough of a gap to justify Coca-Cola's much higher valuation. Coca-Cola trades at 29 times earnings versus PepsiCo's 17, while PepsiCo's 4.2% dividend yield far exceeds Coca-Cola's 2.2%. Both are Dividend Kings, with Coca-Cola extending its increase streak to 64 years and PepsiCo to 54. This doesn't make Coca-Cola a sell — its 200-plus brands remain globally popular, and analysts expect 4% revenue growth in 2026, enough to satisfy income-focused holders. But PepsiCo's improving fundamentals, lower valuation, and higher yield make it harder for Coca-Cola to draw new buyers.