(Source: coca-cola.com)

Given recent results, should dividend investors kick Coca-Cola (NYSE: KO) to the curb and go with...

(Source: pepsico.com)

Most investors opt for Coca-Cola or PepsiCo (NYSE: PEP) for safe and generous dividend payments. As far as dividend yield goes, they're a match at 2.90%. They both generated operating cash flow of approximately $10 billion over the past year, and they both sport similar debt-to-equity ratios: 1.12 for Coca-Cola versus 1.22 for PepsiCo. Therefore, if you're looking for something that separates the two companies, you might want to consider recent results.

If you didn't have the time, or the interest, to read these two fourth-quarter reports, then you have come to the right place. Only the most important points will be summed up here. 

Generic statements
If you read Coca-Cola's fourth-quarter earnings report, then you will find some comments from upper management which state that the company will expand its productivity, expand the marketing of its brands, and advance its innovative strategy. These statements might impress some people, but they don't provide any specifics. This often means that a company isn't sure what to do in order to drive its top line, and it doesn't know how to communicate that to its shareholders.

Fortunately, the report gave a couple of strategy specifics. One, Coca-Cola will generate an incremental $1 billion in cost savings which it will use for media investments. Two, Coca-Cola will buy back $2.5 billion to $3 billion worth of its shares in 2014. This will help aid earnings-per-share, which will then have the potential to buoy its stock price. This is good news for dividend investors. 

As you likely already know, Coca-Cola has taken a 10% stake in Green Mountain Coffee Roasters (GMCR.DL). For now, forget about the "Coffee Roasters" part of that name and think of it as "Green Mountain." That's because Green Mountain will launch a cold-brewing system in the future that will feature Coke. This will put Coca-Cola in consumers' homes, but there's no telling if this move will have any real traction. This is a much bigger positive for Green Mountain than it is for Coca-Cola, at least for now.

Both Coca-Cola and PepsiCo cited challenging macroeconomic conditions in their recent reports, but one of them has easily outperformed the other.

Coca-Cola vs. PepsiCo
On a reported basis in the fourth quarter, Coca-Cola suffered net revenue and operating income declines of 4% on a year-over-year basis. Looking at the bigger picture, for fiscal-year 2013, Coca-Cola's net revenue slid by 2% and operating income declined by 5%. One of the few minor positives was global volume, which increased by 1% in the fourth quarter and by 2% for the fiscal year. Therefore, if Coca-Cola can find ways to cut costs, as it plans to do, then it could see sustainable profitable growth in the future.

On a reported basis for the fourth quarter, PepsiCo saw net revenue increase by 1% year-over-year. Operating profit and earnings-per-share improved by 8% and 6%, respectively. In regard to global volume, snacks saw a 3% upswing and beverages increased by 1%. Not fantastic, but clearly more impressive than the results from Coca-Cola.

For fiscal-year 2013, PepsiCo also saw net revenue increase by 1%. Operating profit and earnings-per-share increased by 7% and 10%, respectively. In regard to global volume, snacks climbed by 3% and beverages grew at a 2% clip.

PepsiCo announced that it will extend its $1 billion annual productivity savings initiative through 2019, which includes manufacturing automation and the closing of certain manufacturing facilities. It also announced that it will increase capital returns to shareholders via stock buybacks and dividends by 35%. Additionally, it should be noted that PepsiCo performed an exhaustive review on its North American Beverage business and concluded that it's worth keeping due to its profitability, significant free cash flow generation, and brand recognition benefits.

A big reason why PepsiCo manages to outperform Coca-Cola is its diversification. If you take away PepsiCo's snacks segment, then it's very similar to Coca-Cola. However, that snacks segment is a reality, and this diversification gives the company an edge in regard to sustainable profitability and cash flow generation.

The Foolish takeaway
Coca-Cola should continue to reward shareholders with dividends and stock buybacks, but the same goes for PepsiCo. Also, PepsiCo is more diversified while also delivering stronger performances almost across the board. Coca-Cola has managed to establish itself in consumers' homes first, but the consumer still remains health-conscious. Therefore, it's difficult to determine the impact of this move. Conclusively, PepsiCo might present a better dividend investment opportunity than Coca-Cola going forward. Please do your own research prior to making any investment decisions.