Soft drink giant Coca-Cola (NYSE:KO) and computing powerhouse IBM (NYSE:IBM) are household names with global operations and gargantuan market caps. They're also a tale of two tone-setting American businesses, sharing the distinction of being among the 30 names in the Dow Jones Industrial Average index.

IBM and Coke don't have a whole lot in common beyond those defining attributes. Which ticker is a better fit for your investment portfolio? Let's have a look.

Two young businessmen stand back to back in an alley, one wearing red boxing gloves.

Image source: Getty Images.

What's up with Coca-Cola?

After suffering lower sales and earnings for a couple of years, Coke recently broke those downtrends with positive developments across the board.

The company is growing sales across both emerging and developed markets, driven by different strategic ideas for each individual territory. For example, Mexican sales were boosted by a wider distribution of low-cost beverage packaging, while Brazilian revenues expanded thanks to the installation of 100,000 drink coolers in that market. In North America, Coke's sugar-free drinks are gaining market share.

Looking ahead, the company is exploring several new product ideas, such as the Coke Energy energy drink and several new tea brands in the Asian market. Coke will also challenge National Beverage's LaCroix flagship with the launch of AHA sparkling waters in March 2020.

All things considered, Coke is relaunching its stalled growth engines with growth strategies tailored to both global and local consumer trends.

A quick look at Big Blue

Like Coke, IBM is running a turnaround campaign these days. The computing titan is moving out of hardware sales with a deeper focus on software and services. That strategy got a serious adrenaline boost from its $34 billion buyout of open-source software specialist Red Hat, which closed in July.

The Red Hat acquisition hasn't done much to boost IBM's top or bottom lines so far because the deal was finalized in the middle of the third quarter. Red Hat posted $1 billion of third-quarter sales, but IBM could only recognize one-third of that top-line haul while bearing all the costs of finalizing the buyout.

That imbalance will reverse over the next couple of quarters as IBM gets to recognize all of the benefits of owning Red Hat while the buyout-related expenses start to fade in its rearview mirror. This looks like a crucial turning point in IBM's long-suffering turnaround, but investors have not warmed up to that idea yet.

The winner: IBM

I have the greatest respect for Coca-Cola and I do expect it to outperform the market in the long run. Management's willingness to shake things up in response to changing market realities makes Coke a solid buy in my book.

But IBM shares that quality while also trading at a massive discount. You can pick up shares of Big Blue at bargain-bin valuation ratios such as 12 times trailing earnings or 16 times free cash flows, compared to 30 times earnings and 75 times cash flows for Coke.

So Coca-Cola may be poised for slow-burning gains in the long term, but IBM is set up to crush the market in 2020 as the benefits of the Red Hat deal become more obvious. In a battle of two solid value stocks, IBM comes out on top this time.