Beverage giant Coca-Cola (KO) definitely sets itself apart from rivals PepsiCo (PEP -0.62%) and Dr. Pepper Snapple Group (DPS). Regardless of fears surrounding declining soda demand and market saturation, Coca-Cola deserves a long-term spot in your portfolio and here's why.

Superior balance sheet
Coca-Cola maintains a superior balance sheet in terms of cash and debt giving it better protection against hard times and the ability to invest in its future. For example, more cash gives Coca-Cola a greater ability to invest in product innovation and less debt means lower interest payments translating into higher cash flow serving as a catalyst for future dividend increases and capital gains. As of the most recent quarter, Coca-Cola's cash stash of $17 billion represented 53% of stockholder's equity. Its long-term debt to equity equated to a modest 44%. By contrast, PepsiCo's $9.5 billion represents 43% of its stockholder's equity and a little more than half of Coca-Cola's balance.  PepsiCo's long-term debt to equity stands at 108% more than doubling the debt load of Coca-Cola. Dr. Pepper Snapple Group's balance sheet stands at a distant third with a mere $119 million in cash and debt representing 109% of its stockholder's equity. 

Market leadership
Coca-Cola's superior balance sheet stems from its market dominance. According to the Bloomberg Industry Leaderboard, Coca-Cola resides in the top spot for beverages with an 8.4% global market share. Rival PepsiCo holds the No. 6 spot with a 3.6% market share according to the list. Dr. Pepper Snapple Group doesn't even rank in the leaderboard's top ten. This huge presence means Coca-Cola commands a great deal of economic authority giving it pricing flexibility and the ability to purchase supplies at a lower cost versus its rivals.

Global presence
One of the reasons that Coca-Cola resides in the No. 1 market spot lies in the fact it maintains a presence all over the globe. The citizens of Mexico drank the most servings of any country in the world with 745 consumed in 2012. The United States consumed 401 servings during the same time. Many parts of the world such as India, Indonesia, and China remain vastly underpenetrated in terms of servings meaning the potential for market expansion still exists. While rival PepsiCo also maintains a huge global presence, giving Coca-Cola a run for its money, Dr. Pepper Snapple Group operates mainly in the western hemisphere allowing both Coca-Cola and PepsiCo to move further ahead.

Product focus
Comparing Coca-Cola and PepsiCo equates to comparing apples and oranges. Rival PepsiCo sells snacks in addition to beverages all over the globe. In fact, snack volume was more than three times PepsiCo's beverage volume in the most recent quarter meaning its snack business actually represents its strength and possibly its saving grace.  However, Coca-Cola mainly sells beverages.  While this may represent a negative from a diversity standpoint it also means that Coca-Cola can focus on its core competency of innovating, selling, and distributing beverages both carbonated and noncarbonated while PepsiCo has to divide its attention. Dr. Pepper Snapple Group sells mainly beverages as well; however, its product portfolio still largely consists of carbonated sodas and needs more non-carbonated innovation .

Dividend
As of this writing, Coca-Cola pays its stockholders $1.12 per share per year in dividends translating into a 2.8% dividend yield, easily exceeding what you can receive in most savings accounts. The company pays out roughly 40% of its free cash flow in dividends meaning the income stream remains relatively safe  . PepsiCo also pays out roughly half of its free cash flow   in dividends amounting to $2.27 per share per year which yields 2.8%. Dr. Pepper Snapple Group pays its shareholders $1.52 per year in dividends giving them a yield of 3.2%. Dr. Pepper Snapple Group pays out 44% of its free cash flow  , but shareholders should worry about the dividend's safety considering the companies low cash balance  .

Foolish takeaway
Coca-Cola's future lies in emerging markets expansion and non-carbonated beverages such as Honest Tea and Minute Maid Juice. PepsiCo's continued focus on snacks may cause it to drop the ball on its beverage segment further enhancing Coca-Cola's strategic position in beverages. A major snack acquisition on Coca-Cola's part to mimic PepsiCo's snack strategy may deter Coca-Cola from its core competency of selling beverages. Dr. Pepper Snapple Group barely makes a dent in Coca-Cola's dominance and even relies on Coca-Cola for some of its distribution.  With that said Coca-Cola isn't going anywhere anytime soon.