HSY vs PEP: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
PEP is the larger of the two ($190.64B market cap): the incumbent the market prices for continued execution (15.54x forward earnings, beta 0.37). HSY is the smaller challenger ($35.17B), priced similarly on forward earnings (17.74x): more room to run, but more to prove. The real question is which set of drivers you believe, and whether owning one (or both) leaves you over-concentrated.
HSY vs PEP: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | HSY | PEP | What it tells you |
|---|---|---|---|
| Market cap | $35.17B | $190.64B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 17.74 | 15.54 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 23.91 | 18.29 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 0.10 | 0.37 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 17% of range | 15% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 7.66 | 8.63 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Before you buy: how HSY and PEP affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. HSY and PEP share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined HSY and PEP exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does The Hershey Company (HSY) do?
The Hershey Company is the dominant confectionery maker in North America, built on a portfolio of iconic brands including Hershey's, Reese's, Kisses, Kit Kat (US license), Jolly Rancher, and Twizzlers. It reports across chocolate and sweets plus a growing salty-snacks and better-for-you portfolio (SkinnyPop, Dot's Homestyle Pretzels, Pirate's Booty, LesserEvil), and it generates more than $11 billion in annual revenue. As a consumer-staples business, Hershey has historically offered steady demand, pricing power from beloved brands, high margins, and a consistent, growing dividend, which is why many investors hold it as a defensive core holding rather than a fast grower.
What does PepsiCo (PEP) do?
PepsiCo is one of the world's largest food and beverage companies, generating roughly $19.4 billion in the first quarter of 2026 across a portfolio that spans Pepsi, Gatorade, Mountain Dew, Lay's, Doritos, Cheetos, Tostitos and Quaker. Its Frito-Lay snack arm controls more than 60% of the U.S. salty-snacks market and carries operating margins north of 40%, making convenient foods the company's profit engine, while its beverage unit holds the No. 2 spot in U.S. carbonated soft drinks (behind Coca-Cola) and leads sports drinks with Gatorade. Roughly half of revenue comes from foods and the business is spread across North America and fast-growing international markets.
HSY vs PEP: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- HSY drivers: Cocoa cost normalization and margin recovery; Pricing power from iconic brands.
- PEP drivers: Frito-Lay snack moat; Volume recovery and value pricing.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: The dominant risk is cocoa cost inflation: chocolate depends on a single volatile agricultural commodity, and the 2024 to 2025 spike showed how fast margins can compress, with management noting pricing has not yet fully offset costs. For PEP, pepsiCo faces several structural headwinds.
HSY or PEP: which should you pick?
Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick HSY if you believe its drivers more; PEP if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the HSY and PEP guides.
HSY vs PEP: the full fundamentals
HSY. These figures are approximate and tied to the asOf date; verify live numbers before acting. Hershey's earnings are unusually sensitive to cocoa prices, so 2025's depressed profits and 2026's guided rebound should be read as a recovery off a commodity-driven trough rather than a new steady-state run rate. Always check the latest reported results, guidance, and dividend before making any decision.
PEP. PepsiCo grew Q1 2026 revenue about 8.5% year over year to roughly $19.4 billion with core EPS near $1.61, beating estimates and expanding operating margin to about 17%. At around $143 (July 2026) the stock sits roughly 15% below its February high near $171 and trades at about 16x forward earnings, below the S&P 500 average, while yielding close to 4%. The valuation reflects a market pricing in slow growth in exchange for defensive stability and reliable income.
Headline figures (approximate, Jul 2026): HSY shows revenue (annual) ~$11 billion-plus, with 2026 net sales growth guided to roughly 4% to 5%, profitability High-margin staples business, but margins were compressed hard in 2025 by cocoa costs and are recovering in 2026, earnings trajectory Adjusted EPS fell sharply in 2025 on cocoa; management guides a large rebound (roughly 30%-plus adjusted EPS growth) for 2026 off the depressed base, valuation multiple Trades as a premium consumer-staples name; multiple can look full for a slow grower, and depends heavily on where cocoa-driven earnings settle; PEP shows q1 2026 revenue ~$19.4B, q1 2026 core eps ~$1.61, market cap ~$195B, forward p/e ~16x.
The bottom line: HSY vs PEP
HSY and PEP are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined HSY and PEP exposure against your real portfolio. It is not an investment adviser.
Wondering how HSY or PEP fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in The Hershey Company with AI
Connect the broker you already use and ask Walnut's AI how HSY fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between HSY and PEP?
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The Hershey Company is the dominant confectionery maker in North America, built on a portfolio of iconic brands including Hershey's, Reese's, Kisses, Kit Kat (US license), Jolly Rancher, and Twizzlers. PepsiCo is one of the world's largest food and beverage companies, generating roughly $19.4 billion in the first quarter of 2026 across a portfolio that spans Pepsi, Gatorade, Mountain Dew, Lay's, Doritos, Cheetos, Tostitos and Quaker. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is HSY or PEP the better stock?
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Neither is universally better. PEP is the larger incumbent; HSY is the smaller challenger and looks pricier on forward earnings. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, HSY or PEP?
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On forward P/E (as of August 2026), HSY trades at 17.74x and PEP at 15.54x, so PEP is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both HSY and PEP?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of HSY vs PEP?
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HSY: The dominant risk is cocoa cost inflation: chocolate depends on a single volatile agricultural commodity, and the 2024 to 2025 spike showed how fast margins can compress, with management noting pricing has not yet fully offset costs. Aggressive price increases risk softening volumes as shoppers trade down or buy less, and chocolate volume declines have already been a concern. Broader input, tariff, and packaging costs add pressure, and health and sugar-reduction trends are a slow structural headwind for confectionery. Hershey also carries meaningful controlling-shareholder dynamics through the Hershey Trust, which can affect governance and strategic flexibility. Finally, as a mature staples name, growth is modest, so the stock can lag in strong bull markets even when the business is healthy, and its valuation can look full for a slow grower. PEP: PepsiCo faces several structural headwinds. Organic revenue growth has slowed, rising only about 2.6% in Q1 2026, as inflation-weary consumers trade down to private-label snacks and drinks. Widespread adoption of GLP-1 weight-loss medications and broader health awareness could pressure long-term demand for sugary sodas and salty snacks, the core of PepsiCo's portfolio. Input-cost inflation, currency swings across its large international footprint, and intense competition from Coca-Cola, Monster, Mondelez and store brands all weigh on margins. As a mature mega-cap, growth is modest, so the stock is sensitive to any stumble in volumes or to rising interest rates that make its dividend yield less competitive.
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Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell HSY or PEP; figures are approximate and dated (as of August 2026). Verify current data before investing.