Few stocks have been chosen as the cornerstone in retirement portfolios as often as Coca-Cola (NYSE:KO) and Procter & Gamble (NYSE:PG). These dividend-paying stalwarts are looked on to provide safety and stability for nest eggs -- and for good reason: between mid-2000 and the end of 2014, they returned an average of 229% for investors -- including dividends. That far outpaced the S&P 500's return of just 80%. 

But the past three years haven't been as kind to shareholders. While the market has continued to zoom ahead -- returning 42% for shareholders -- Coke and Procter & Gamble have lagged, returning 17% and losing 4%, respectively. Is this an aberration, or a sign of trouble to come? And are either of these stocks still worthy of a spot in your nest egg?

A golden egg with a hundred dollar bill sticking out of a crack in it.

Image source: Getty Images.

These are the questions I'm aiming to answer today. By comparing these two stocks on three different facets, we can get a better idea of what we're getting if we buy shares.

Financial fortitude

There's no telling when the next crisis will hit. It could be company-specific, or affect the entire economy. As investors, we want to know that our companies will not only survive, but -- ideally -- thrive as a result of such volatility.

That's why measuring financial fortitude is so important. It can help you narrow down the number of potential investments to the tiny few that can survive and thrive in a meltdown.

Here's how the two stack up.

Company Cash Debt Free Cash Flow
Procter & Gamble $16 billion $22 billion $10.4 billion
Coke $44 billion $30 billion $5.3 billion

Data source: Yahoo! Finance. Cash includes long and short-term investments. Free cash flow presented on trailing-12-month basis.

Each company has its own strengths and weaknesses here. Coke has a much stronger net cash position of $14 billion, while Procter & Gamble actually has more debt than cash on hand. At the same time, Procter & Gamble's cash flows are twice as strong as Coke's, meaning the company has far more coming into its coffers every year. 

Taking these two things together, I would say that each company is "robust" in the face of a financial crisis: they are strong enough to not be mortally wounded by a downturn, but have high enough debt levels -- or low-enough relative free cash flows -- that they wouldn't be huge beneficiaries either.

Winner = Tie

Valuation

Next, we have valuation -- which can be a tricky aspect of investing to nail down. In order to give us as wide a view as possible, here are five metrics I like to use when evaluating dividend-paying stocks, and how the two companies compare.

Company P/E P/FCF PEG Ratio Dividend  FCF Payout
Procter & Gamble 19 19 2.7 3.7% 70%
Coke 23 35 2.9 3.6% 118%

Data source: Yahoo! Finance, E*Trade. Non-GAAP earnings used to calculate P/E when applicable.

Here we have a clear winner. Procter & Gamble has more favorable values on every metric. It is cheaper based on earnings and free cash flow -- even after taking growth into consideration (PEG ratio). Additionally, while Procter & Gamble's dividend yield is only slightly higher, it is currently much more sustainable than Coke's -- as it eats up roughly 70% of the company's free cash flow.

Coke, on the other hand, is actually using up all of its free cash flow -- and then having to tap its cash hoard -- to pay its shareholders. That might be all right over the short term, but it's not sustainable over the long run.

Sustainable competitive advantages

But nothing should be more important to long-term investors than the strength of a company's sustainable competitive advantage, or moat. Both Procter & Gamble and Coke rely primarily on the power of their brands to provide a moat.

According to Forbes, Coke has the world's fifth most valuable brand -- worth roughly $57 billion. The company's products include not only its namesake regular and diet-branded sodas, but also Minute Maid, Powerade, and Dasani water, among others.

Two of Procter & Gamble's biggest brand names -- Gillette razors and Pampers diapers -- also broke the top 100 list on Forbes, placing 32nd and 57th, respectively, and worth a combined $29 billion. The company's brand umbrella also includes familiar names like Tide, Olay, and Head & Shoulders. 

On an absolute basis, it would seem like Coke has the advantage. But I personally think that consumer-packaged goods companies that rely on the power of brands are in trouble. As former hedge fund manager Mike Alkin pointed out in January, millennials are becoming the most powerful consumers, and they favor consumer products that are from small, local, and (when possible) organic companies.

Neither company has brands that fall under those categories. And the trends are proving Alkin's thesis out -- revenue at both companies is down 20% or more over the past five years. Those aren't encouraging trends.

Winner = Tie

My winner is...

So there you have it: both stocks have solid financials, and narrowing moats, but Procter & Gamble wins based on its more favorable valuation. That gives it the edge in this competition.

But if forced to choose, I don't think either stock has particularly promising prospects -- so I don't own, and am not willing to make a positive CAPS call -- for either company. I think there are better places for your hard-earned nest-egg cash.

Brian Stoffel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.