Which 3 Stocks Should YOU Buy? | KO vs PEP, DE vs CAT, JNJ vs MRK | Summary and Q&A

TL;DR

This comprehensive analysis compares the stocks of Johnson & Johnson and Merck, Caterpillar and Deere, and Pepsi and Coca-Cola, highlighting their sales growth, profitability, valuations, and competitive advantages.

Key Insights

• ✋ Merck has a clear advantage in sales growth over Johnson & Johnson, but Johnson & Johnson shows higher profitability and has upcoming spin-off potential to consider.
• ✋ Deere has higher sales and earnings growth compared to Caterpillar, but Caterpillar benefits from its exposure to the infrastructure industry.
• ✋ Pepsi and Coca-Cola have different business models, with Pepsi's diversification in product categories giving it an advantage. However, Coca-Cola has higher profitability.
• 🥳 Valuation and debt ratios should be monitored for all companies, as they can impact future performance.

Transcript

hey bowtie Nation Joseph Hogue here with another stock comparison video Steven in our Facebook group suggested a this versus that theme matching up some of the most popular stocks against each other to see which is the better investment and that's exactly what we're gonna do comparing some of your favorite stocks in a head-to-head Grudge Match to s... Read More

Questions & Answers

Q: What are the key differences in sales growth between Johnson & Johnson and Merck?

Merck shows a clear advantage in sales growth, with a five-year average growth rate of 10-11% annually, compared to Johnson & Johnson's 5.5% growth. Merck is also trending higher in current sales growth, beating the sector median.

Q: How do Johnson & Johnson and Merck compare in terms of profitability?

Both companies are profitable, with Johnson & Johnson showing a higher gross profit margin and trending higher in core profitability. However, Merck has higher profitability margins overall and is growing its margins at a faster pace.

Q: What factors should be considered when comparing Caterpillar and Deere?

Deere has higher sales and earnings growth, driven by a strong renewal cycle in the agriculture industry. Caterpillar benefits from its exposure to the infrastructure industry, with the potential for increased sales growth in the future. The impact of the dealer network and infrastructure spending should be considered.

Q: How do Pepsi and Coca-Cola differ in terms of their business models?

Coca-Cola is primarily focused on the carbonated soft drink market, while Pepsi is the second-largest Beverage Company globally and leads in the snacks market. Pepsi's diversification in product categories, including snacks, gives it an advantage.

Q: Which company has higher profitability between Pepsi and Coca-Cola?

Coca-Cola has higher profitability, with a higher ebitda margin and better conversion of sales into profits. Pepsi's profitability is lower, primarily due to the lower profitability of the snacks category compared to beverages.

Summary & Key Takeaways

• The analysis compares Johnson & Johnson and Merck, finding that Merck has a clear advantage in sales growth. However, Johnson & Johnson shows higher profitability trends. The talc-related litigation and upcoming consumer business spin-off are important factors to consider for Johnson & Johnson.

• Caterpillar and Deere are compared, with Deere having higher sales and earnings growth, while Caterpillar benefits from its exposure to the infrastructure industry. Valuation and the impact of the dealer network are key considerations for both companies.

• Pepsi and Coca-Cola are compared based on their business models, sales growth, profitability, and valuations. While Coca-Cola has higher profitability, Pepsi's diversification in product categories, including snacks, gives it an edge.