It's a clash between the world's largest beverage company and an emerging competitor.

In one corner, Coca-Cola (KO 1.38%) has a long history of rewarding shareholders with steady growth and rising profitability, propelling the stock to a 16% return over the past year.

On the other side, shares of the once high-flying Celsius (CELH 7.75%) have lost their fizz amid a string of lackluster quarterly earnings. A reset in company expectations has driven the stock down a staggering 74% from its 52-week high.

Should investors stick with the proven industry leader, or can the energy drink phenomenon regain its pop? Let's discuss whether Coca-Cola or Celsius is the better stock to buy now.

Image source: Getty Images.

The case for Coca-Cola

The allure of Coca-Cola as an investment stems from its iconic and globally recognized brand. From its traditional focus on soft drinks, Coca-Cola today is more diversified than ever, with a portfolio of more than 200 brands across categories like sports drinks, flavored water, juices, and dairy products. That ability to innovate with new concepts to adapt to changing consumer tastes is a big part of the company's continued success. Beyond the economy's ebb and flow, there's a good chance this company will be around for the next 100 years.

For the full year ended Dec. 31, 2024, organic revenue climbed by 12% from 2023, through higher unit volumes and pricing initiatives. Notably, the company even gained market share in the non-alcoholic ready-to-drink beverage industry last year, with developing and emerging markets also representing important growth drivers.

Its increase in adjusted earnings per share (EPS) on a currency-neutral basis was even stronger, up 17% year over year, reflecting a premiumization of its sales mix that has helped lift margins. For 2025, Coca-Cola expects another banner year, targeting organic revenue growth between 5% and 6% alongside an 8% to 10% EPS increase.

Investors are confident in the company's ability to execute its growth strategy and consolidate global market share, and they have plenty of reasons to buy and hold Coca-Cola for the long run.

The case for Celsius

Celsius has capitalized on consumers seeking healthier beverage options, with its fitness-focused sugar-free energy drinks proving highly popular as sales climbed 319% between 2021 and 2023.

Unfortunately, 2024 marked a setback in the company's trajectory, with annual revenue of $1.3 billion for the year ended Dec. 31, 2024, up just 3%. Management cited an inventory glut at its main distributor, PepsiCo, which impacted the timing of large orders, to explain the slowdown leading to 2024 EPS of $0.70, down 10% from 2023.

Despite the disappointing 2024, Celsius maintains overall solid fundamentals with its trends at the retail level, suggesting its product portfolio continues to resonate with consumers.

Perhaps the company's biggest development is its recently announced acquisition of Alani Nu, a fast-growing specialty energy drink brand targeted toward women. Celsius believes the combined company will unlock significant synergies and strengthen its position in functional energy drinks.

According to Wall Street analysts, Celsius is projected to post EPS of $0.96 this year, marking a 37% rebound compared to 2024, as total revenue surges by more than 30%. Those figures are particularly compelling, considering that the stock is trading at a forward P/E of 27, down from as high as 130 last year. While Celsius still commands a modest premium to Coca-Cola and its forward P/E of 24, the spread could be justified given Celsius' more robust outlook for 2025.

By this measure, the best reason to buy Celsius stock may hinge on viewing 2024's weakness as temporary, with a strong recovery on the horizon.

CELH PE Ratio (Forward) data by YCharts

Decision time: I'll take a sip of Celsius

Choosing between Coca-Cola and Celsius is a tough call, as I'm bullish on both stocks. Coca-Cola defines the classic blue chip investment with its 3% dividend yield, while Celsius may have more growth potential as it expands internationally.

If forced to choose just one stock to buy now, I'd favor Celsius with the prediction that it will outperform in 2025 as its turnaround strategy gains traction. Investors comfortable navigating the ups and downs of the market could consider a small position in Celsius within a diversified portfolio.