Key Points
Hershey maintains a dominant position in the North American confectionery market with a high concentration of domestic manufacturing.
Coca-Cola leverages a vast global distribution network through independent bottling partners to maintain industry-leading profitability.
Which of these consumer giants offers the best combination of value and stability for your 2027 portfolio?
Investors often turn to Hershey (NYSE:HSY) and Coca-Cola (NYSE:KO) when searching for stability. These brands dominate their respective shelves, but which offers a better path for your capital through 2027?
Hershey is a leader in chocolate and salty snacks, focusing heavily on its established brands in the North American market. Coca-Cola operates a massive global beverage empire with products sold in over 200 countries. While both companies provide essential consumer goods, their growth profiles and capital structures offer distinct trade-offs for long-term investors.
The case for Hershey
Hershey markets iconic brands like Reese's and Twizzlers alongside its core chocolate bars and sweets. In its latest strategies, it has expanded aggressively into salty snacks to diversify its portfolio beyond traditional confectionery products. Its most significant customer is McLane Company, which accounted for approximately 27% of sales in 2025, and such customer concentration adds a layer of risk to the business.
In its latest annual report covering FY 2025, revenue reached approximately $11.7 billion, a growth of roughly 4.4% over the prior year. Net income for the period was nearly $883.3 million, which was a decrease compared to the previous fiscal year. This reflects a net margin, which is the percentage of revenue kept as profit after all expenses, of nearly 7.6%.
As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 1.2x. This ratio measures total debt against shareholder equity, while the current ratio, which measures the ability to pay short-term debts, is nearly 1.2x. Free cash flow, or the cash remaining after capital expenditures, was approximately $1.7 billion for the year.
The case for Coca-Cola
Coca-Cola manages a massive portfolio including sparkling soft drinks, water, and sports beverages sold in more than 200 countries. The company utilizes a global system of independent bottling partners, with the five largest representing nearly 44% of worldwide unit volume. It also secured a significant new partnership with KFC that will transition all U.S. locations to its beverages by spring 2027.
For FY 2025, revenue reached nearly $47.9 billion, representing growth of approximately 1.9% compared to the prior fiscal year. Net income for the year was roughly $13.1 billion, showcasing the company's significant scale. The company maintained a net margin of close to 27.3%, indicating its ability to convert high sales volumes into profit.
On its December 2025 balance sheet, the debt-to-equity ratio was roughly 1.5x. Free cash flow for the period was nearly $5.3 billion, and Coca-Cola remains a prominent name among beverage stocks.
Risk profile comparison
Hershey faces significant commodity price volatility, particularly for cocoa, which remains structurally elevated and directly impacts production costs. It relies heavily on the confectionery and snacking industry where competition is fierce and pricing pressure remains constant for major brands. Manufacturing is also concentrated in the United States, meaning the company faces risks from potential disruptions in its domestic supply chain or manufacturing facilities.
Coca-Cola faces intense competition from global rivals such as PepsiCo (NASDAQ:PEP) and various emerging private-label brands. The company must navigate evolving health-related regulations and intense public scrutiny regarding sweetened beverages, which may lead to new taxes or restrictive labeling requirements. Additionally, it remains vulnerable to foreign currency exchange rate fluctuations and depends heavily on the financial stability of its independent bottling partners.
Valuation comparison
Hershey appears significantly cheaper on both sales and earnings multiples, while Coca-Cola commands a premium for its scale.
The P/S ratio measures price relative to sales over the past twelve months. Meanwhile, the Forward P/E compares the stock price to future earnings estimates.
| Metric | Hershey | Coca-Cola |
|---|---|---|
| Forward P/E | 20.0x | 28.8x |
| P/S ratio | 2.9x | 8.1x |
Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy for 2027?
I'd go with Coca-Cola. First and foremost, I'm a fan of its steady growth: It sold about 5% more drinks worldwide in Q3 and raised its full-year outlook for the third time in a row. Berkshire Hathaway has owned it for decades and has never sold a share, which says a lot about how durable the business has been.
In its Q3 2026 results reported on Oct. 27, Coca-Cola's revenue rose 7% year over year, beating Wall Street's expectations. Sales volume in its home market of North America was flat, but demand overseas picked up the slack, and the company now expects higher profit growth this year than it first forecast.
To give Hershey its due, it beat earnings estimates and raised its profit outlook in Q3. But lower ingredient costs and tariff refunds gave its profit a big lift, and it sold fewer products as prices went up, which kept sales growth small. What's more, nearly all of its sales come from North America, so it has little overseas growth to lean on.
For investors thinking in years rather than quarters, Coca-Cola pairs steady growth around the world with a dividend that pays you along the way. That mix of growth and income is why it is my pick.
Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Hershey. The Motley Fool has a disclosure policy.