In 2022, PepsiCo invested $550 million in Celsius for an 8.5% ownership stake, at a market cap of approximately $7 billion. Celsius currently has a market cap of about $9.4 billion.
These partnerships enable the younger brands to leverage Coca-Cola and Pepsi's extensive distribution networks, allowing them to reach the market much faster than they could on their own. Meanwhile, the established beverage giants benefit by avoiding the need to develop their own energy drink brands, instead backing products that have already demonstrated traction. It's a win-win partnership for both sides
Energy drink stocks, Monster Beverage (NASDAQ: MNST) and Celsius (NASDAQ: CELH), have both struggled in the year to date and over the past 12 months.
Monster has declined 20% YTD and 18% over the past year. However, looking at a five-year timeframe, Monster is still up nearly 70%, currently trading around $47.
Celsius has dropped 32% YTD and over the past year. Yet, over a five-year period, Celsius has surged 30-fold, now trading around $40.These long-term uptrends with short-term pullbacks may present opportunities for investors to buy at more reasonable prices. Therefore, we believe it is timely to discuss these stocks now.
Both companies are backed by beverage giants. In 2014, Coca-Cola paid $2.2 billion for a 16.7% stake in Monster, valuing the company at a market cap of $13 billion. Monster now has a market cap of $46 billion.
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