Coca-Cola vs. Altria: Coca-Cola

In the competitive spirit of college basketball's annual championship tournament, The Motley Fool brings you Stock Madness 2007! Our writers are making head-to-head arguments for their chosen stocks (but not necessarily investment recommendations -- this is, after all, a game), and you'll pick the winners with your article recommendations and Motley Fool CAPS ratings. Who will win the right to cut down the net? Let's tip things off and find out!

This one's going to be ugly. Although Coca-Cola (NYSE: KO  ) vs. Altria (NYSE: MO  ) may seem like a competitive matchup of world-class titans, it'll probably end up like most of the first-round games in the NCAA tourney: a huge blowout.

Team Altria -- coached by my formidable fellow Fool Dan Caplinger -- is a very talented stock in its own regard. According to renowned Professor Jeremy Siegel, Altria was the best-performing stock from 1957 to 2003, returning an annualized 19.75% per year. Coke averaged a "measly" 16% per year during that time frame.

An unstoppable brand
But let's get real here. March Madness isn't about crunching numbers or studying academic papers. That's what midterms are for. Nope. March Madness is about leaving the classroom for a few weeks and cheering raucously (and sometimes hopelessly) for the team you love the most.

In that rah-rah college spirit, how can any company -- let alone a purveyor of cigarettes and tobacco products -- gain more Foolish votes than the most beloved brand on Earth? A brand that's synonymous with fun, happiness, and plain old good times?

You know, exactly like the spirit of March Madness itself.

So, while fans of the No. 1-seeded Tar Heels bleed Carolina blue this March, I'll be bleeding brownish sugar-water for the next few weeks. And oh, how sweet it is.

Have a Coke (not a smoke) and a smile
I mean, who doesn't love the taste of an ice-cold Coke on a hot summer's day? I really do think we humans are genetically predisposed to "Enjoy Coke" with a big fat smile on our faces. When people in more than 200 countries consume greater than 1.4 billion servings day in and day out, what other conclusion can you come to?

Obviously, this is no recent phenomenon, either. The company has been selling the same secret syrup since the late 1800s, when it was first invented by John Pemberton. Things change fast, but there's no question that the world will be guzzling Pemberton's formula 10, 20, and even 100 years from now.

And that means money, baby. Money.

Red, white, and you
So, for this opening tussle, I've held back all the Coke arguments that have to do with defensive dividends, margins that jump out of the gym, and stat-stuffing cash-flow production. I've got to rest some of my players, err, arguments, for the later rounds.

Risky strategy? Maybe. But Coca-Cola is, quite simply, the world's most recognized juggernaut. Its brand power alone -- like the names Duke, North Carolina, and UCLA in college basketball -- should be strong enough to carry it past the first round

No offense, Dan, but my Coca-Cola-crazies are ready to run your Marlboro men (and their smoke-blackened lungs) off the computer screen. We're taking the title, and steamrolling through Tobacco Road is our first order of business.

Not even a miracle buzzer-beater from Jeremy Siegel can save Altria now.

I'd like to buy the world a vote
There you have it, stock fans. Are you ready for the sugary-sweet taste of victory? If so, head to Motley Fool CAPS and rank Coca-Cola "outperform." If getting rolled, lit, and smoked (off the court) is more to your liking, rate it "underperform." In a few days, we'll tally your votes to determine which stocks will advance one step closer to the title.

Read our opposing article on Altria, or see all the entries in the tournament.

Think you could pitch your favorite stock -- or ditch your least favorite one -- in 27 seconds or less? That's what we're doing over at Motley Fool CAPS. Check out our new stock videos.

Fool contributor Brian Pacampara drinks just as many Cokes as Warren Buffett, but he owns just a tad less of the company than Warren does. Coke is an Inside Value pick. The Fool's disclosure policy always comes with a smile.


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