It's not hard to see why both Coca-Cola (KO -0.69%) and Home Depot (HD 0.08%) have been staple members of the Dow Jones Industrial Average for decades. They dominate their respective industries, generate massive annual profits, and return billions to shareholders each year through dividends and stock buybacks.

But which blue chip giant would make a better addition to your portfolio right now?

Let's take a closer look.

Coca-Cola is growing quickly

While both stocks are trailing the wider market in 2023, Coke's positive returns reflect its stronger growth profile. The beverage giant recently reported double-digit organic sales gains into early 2023, with both volumes and prices rising at a decent clip.

Home Depot posted flat sales in the fourth-quarter period that ended in late January. And while sluggish growth periods don't threaten the wider investment thesis, the home improvement giant may be facing bigger challenges ahead.

Customer traffic fell 6% in Q4 and declined by 5% for the full 2022 fiscal year. Investors will be focused on that metric when the chain reports its first-quarter results in mid-May, as it will be hard to grow sales for long by relying entirely on increased spending.

Home Depot's profit challenge

Coca-Cola edges out the home improvement retailer on earnings. Executives are calling for profits to rise by between 4% and 5% in 2023, while Home Depot is on track for a modest decline. The retailer is still struggling with increased costs, including an estimated $1 billion extra spending set for wages this year.

Coke is also the more profitable business, in part because of its massive global sales network. The company typically converts nearly 30% of sales to operating profit, putting it well ahead of industry rivals like PepsiCo.

Home Depot's 15% margin reflects its dominant industry position, too, as peer Lowe's consistently trails the market leader. Both businesses are likely to generate excellent annual profit growth, but Coke is in a league of its own on this score.

Dividends and value

Coke's dividend yield is comparable to Home Depot's 2.6% rate, but there are a few factors that separate these dividends for income investors. Coke's payout has a much longer string of uninterrupted annual raises at 60 years.

Home Depot paused its raises during the worst of the Great Recession. Home Depot is more generous with its raises, though, with its last boost landing at 10% compared to Coke's 5% hike. Ample cash flow makes it likely that both companies will continue boosting these payouts over time.

As you might expect, Coke's stock is valued at a premium that reflects its faster growth and stellar profit margins. Investors are paying nearly 6.5 times sales for the beverage giant today compared to Home Depot's price-to-sales ratio of 2 times sales. Sure, that elevated valuation raises the risk that you'll overpay for this high-performing business. Operating trends can decelerate quickly as consumer spending slows in a recession, for example.

But that risk is more concentrated for Home Depot, and the business could already be seeing the start of a pullback in the industry after several years of sharp growth. As a result, income investors might prefer Coca-Cola stock over the retailer's shares right now.