Both Coca-Cola (KO 1.27%) and PepsiCo (PEP 0.80%) are on the top-10 list of largest consumer staples companies. They compete head-to-head in the beverage niche of the sector.

But they have some important differences to consider if you are considering stepping in to buy right now. Here's a look at which one could be the best option for you.

What Coca-Cola and PepsiCo do

As far as business complexity goes, Coca-Cola is probably the easier company to understand. It makes beverages. That said, it is the most important non-alcoholic beverage company in the world, with a collection of brands that is second to none. PepsiCo also makes beverages and is a dominant player in the space. But it isn't the industry leader.

That's not a terrible thing, noting that PepsiCo is the most important maker of salty snacks in the world via its Frito-Lay business. And, on top of that, it also makes other food items within its Quaker Oats business. Having operations across three distinct consumer staples segments makes PepsiCo a more complex business, but it also adds diversification. Some investors will like that and some will prefer the more focused model Coca-Cola uses.

How have investors been rewarded over time?

One of the most notable achievements of each of these two consumer staples companies is that they have each reached Dividend King status. That means they have both increased their dividend annually for more than 50 years. Coca-Cola's streak is around a decade longer, but after five decades' worth of dividend hikes that really isn't a material distinction any more. PepsiCo and Coca-Cola stand toe to toe when it comes to returning value to investors via a steadily growing dividend.

That said, PepsiCo's dividend yield is currently higher than that of Coca-Cola. In fact, PepsiCo's 3.7% yield is near the high end of its historical yield range. That's not exactly shocking, noting that PepsiCo's dividend payout ratio is more than 100% today. That suggests that there's a risk of a dividend cut here. To be fair, dividends are paid out of cash flow, not earnings, and a payout ratio can be above 100% for a little while so long as the board of directors is willing to support that payout in other ways (such as using debt).

Coca-Cola's dividend yield is roughly 3%, which is about middle-of-the-road historically speaking. The company's dividend payout ratio is a more reasonable 70%. If you are worried about dividend safety, Coca-Cola will probably be the better option.

What's the value proposition?

The fact that PepsiCo has a historically high yield and a lofty dividend payout ratio is a sign that it isn't performing all that well right now. By comparison, Coca-Cola is doing reasonably well as a business. That said, both of these companies are Dividend Kings and they have each muddled through difficult periods before. If history is any guide, it seems highly likely that PepsiCo will get through this rough patch in relative stride.

For long-term investors PepsiCo's business weakness could be a buying opportunity. Notably, PepsiCo's price-to-sales and price-to-book value ratios are both below their five-year averages right now. That said, the price-to-earnings ratio is over the longer-term average, but that's largely because earnings are more volatile than either sales or book value. All in, given the historically high yield, low P/S ratio, and low P/B ratio, PepsiCo looks relatively cheap.

Coca-Cola doesn't look expensive on the valuation front, either. Its P/S, P/E, and P/B ratios are all below their five-year averages. Add in the dividend yield and Coca-Cola looks fairly priced to a little cheap. It will probably be a better choice for investors whose approach is growth at a reasonable price (GARP) and for those who are focused on dividend reliability, noting the stronger payout ratio.

What are you looking for?

Neither Coca-Cola nor PepsiCo is a bad business, even though PepsiCo is struggling a bit right now. For long-term investors either one could make a good portfolio addition. Still, conservative dividend investors will probably prefer Coca-Cola. Contrarians and turnaround lovers, however, might find PepsiCo the more attractive option.