Companies that make shareholders wealthy must be efficient and profitable, and Coca-Cola meets both criteria. In a given year, the company converts roughly 20% to 30% of its sales into free cash flow and earns a solid 15% return on invested capital. In other words, good things happen when Coca-Cola invests in the business.

PepsiCo and Coca-Cola are both undervalued, and I foresee an appreciable upside in 2025. Click here to read why both PEP and KO stocks are a Buy.

Historically, Coca-Cola KO and PepsiCo PEP have been popular stocks among hedge funds and institutional investors. Speaking to the credibility of Coca-Cola and Pepsi stock, both are owned by renowned institutional investors such as Vanguard Group and BlackRock BLK.