Monster Beverage Corporation (NASDAQ: MNST) is a leading developer, marketer, and distributor of energy drinks and alternative beverages. It is best known for its Monster Energy brand. Based in Corona, California, the company has grown into a global leader in the fast-growing energy drink market. In an earlier analysis, we showed that Monster has strong financial health. In that analysis, it scored 16 out of 19 points using our custom model for assessing business health. That puts it in the top 10% of businesses we track. In this report we look at Monster Beverage’s competitive strength. We compare the company to nine public rivals using four key financial performance indicators:
- Gross margin: Shows pricing power, brand strength and competitive advantage
- Net margin: Reveals operational efficiency and sustained profitability of the business
- Return on equity: Indicates efficient use of capital and self-financing growth
- Capital expenditures: Enables free cash flow growth and financial flexibility
Monster Beverage competitors
We used the annual report, and websites like Yahoo Finance to identify nine publicly traded companies as close competitors of Monster Beverage ($57bn market capitalization):
- Coca Cola ($309bn, NYSE:KO): A global beverage giant that is a competitor but also a strategic partner for bottling and distribution.
- PepsiCo ($183bn, NASDAQ:PEP): Competes with Monster Beverage on functional and performance drinks.
- ABInBev ($128bn, Euronext Brussels: ABI.BR): Competes with Monster in flavored alcoholic drinks for younger consumers.
- Starbucks ($95bn, NASDAQ:SBUX): Competes in the ready-to-drink caffeinated beverages.
- Keurig Dr Pepper ($47bn, NASDAQ:KDP): Competes primarily in the non-alcoholic, ready-to-drink beverage space.
- Primo Brands ($12bn, NYSE:PRMB): Focuses on functional and wellness drinks.
- Suntory ($10bn, TYO:2587.T) A Japanese beverage manufacturer with regional energy drink brands.
- Celsius ($9bn, NASDAQ:CELH) Competes in functional and health-conscious energy drinks.
- National Beverage ($4bn, NASDAQ:FIZZ): Offers functional and lifestyle drinks.
Competitive strength assessment
Gross margin analysis: Monster ranks 5th out of 10
The average gross margin for the top three competitors is 57%. The median of all nine is 45%. With a gross margin of 54% Monster Beverage compares quite well to that benchmark. Even though it ranks only fifth, it is merely a percentage point away from the second best competitor ABInBev (55%). Most large player. except for Starbucks – have similar gross margins between 54% and 60%, thus, they are clearly benefiting from economies of scale:
Large competitors:
- Avg. market capitalization: $167bn
- Avg. gross margin: 56%
Smaller competitors:
- Avg. market capitalization: $26bn
- Avg. gross margin: 35%
Net profit margin performance: Monster ranks 2nd out of 10
The median net margin of the competitors is 10% with an average of 17% for the top 3. Monster Beverage is ahead of most of its peers with a 22% net margin. Most competitors fall between 6% and 14% (Primo brands stands out with a negative margin due to several years with losses). Monster Beverage and Coca Cola dominate the competition with net margins of 22% and 23%, respectively.
While many companies had comparable gross margins, there must be reasons for the greater variation in net margins. One source of reduced net income can be operating expenses. And indeed, when we look at them as a percentage of gross profit we find that Monster Beverage and Coca Cola use a lower share than most competitors with similar gross margins:
- Monster Beverage: 49%
- Coca Cola: 52%
- AbInBev: 54%
- PepsiCo: 74%
- Keurig Dr Pepper: 61%
Another reason that further reduces the net margin for some competitors are non-operating expenses. In some cases they are significantly higher compared to what Monster Beverage and Coca Cola spend.
Return on equity comparison: Monster ranks 4th out of 10
The median return on equity of the competitors is 7% and the average value of the top 3 competitors is 45%. Such a huge discrepancy calls for a closer look:
- Four of the competitors cluster tightly around the 7% median: ABInBev, Keurig Dr Pepper, Suntory, Celsius.
- Starbucks shows a huge negative return on equity (-51%). This is due to negative equity on its balance sheet, thus, the metric loses its meaning.
- We also find three companies with an attractive return on equity greater than 40%: PepsiCo, National Beverage, Coca Cola
Monster Beverage has a return on equity of 20%. That puts it behind that leadership trio but well ahead of the remaining competitors. While that is a decent performance, it does show that a few other companies have found more profitable ways to put their resources to use. Also, they may benefit from a stronger moat or a more durable competitive advantage.
Capital expenditure efficiency: Monster ranks 2nd out of 10
We are not going to look at raw capital expenditures because these would be distorted by company size. Instead, we are going to look at capital expenditures as a percentage of earnings. Naturally, lower is better. The median capital expenditure to earnings ratio of Monster Beverage’s competitors is 40% and the average of the top 3 competitors is only 15%. Looking at the individual performance we find two groups: Top performers and high spenders.
- Celsius, National Beverage and Coca Cola spend no more than 16% of their earnings. Among this group Celsius is leading with a value of 12% and Monster Beverages sits squarely in the middle of that leadership trio with 16% of earnings spent.
- Starbucks, PepsiCo, ABInBev, Suntory all spend between 56% and 89% of their earnings.
What the chart below shows us is how asset heavy the business model is:
- The top four companies focus on developing and manufacturing the drinks, often in form of concentrates or syrups. In addition, they have strategic partnerships with other companies for distribution. This reduces their infrastructure and the related cost.
- At the opposite end of the spectrum we find vertically integrated companies with their own facilities, e.g. for packaging and distribution. For a company like ABInBev, expensive brewing facilities add further costs.
Overall competitive strength scorecard
To gauge overall competitive strength, we look at the performance across all four metrics combined. Here we find that Monster Beverage surpasses the competition in 26 out of 35 comparisons. The company performs better than its peers in 74% of the cases – a strong result. It also ranks above the median rival on all four metrics:
- 9% higher gross margin
- 11% higher net margin
- 13% higher return on equity
- 24% lower capital expenditures to earnings ratio
Moreover, Monster Beverage is close to the top performers in every category except for return on equity.
| Metric | Monster Beverage | Median of competitors | Average of top 3 competitors |
| Gross margin ↑ | 53.6% | 44.7% | 56.5% |
| Net margin ↑ | 21.5% | 10.1% | 16.6% |
| Return on equity ↑ | 20.4% | 7.2% | 45.3% |
| CapEx to earnings ratio ↓ | 16.1% | 40.3% | 14.9% |
Rankings by company
To get a holistic picture that includes each company’s performance on all four metrics, we rank them individually on each metric and compute the average rank per company. The table below summarizes how Monster Beverage compares to its peers on all four key performance indicators in 2025.
Here we find that Monster Beverage ranks second overall, behind the strong leader Coca Cola and just ahead of National Beverage. Coca Cola takes the lead with first ranks on margins and National Beverage has to give way due to its very low rank on gross margin. These three companies are also the only ones that rank in the top 3 for at least 2 metrics.
| Company | Gross margin | Net margin | Return on equity | CapEx to earnings | Average rank |
| Coca Cola | 1 | 1 | 3 | 4 | 2.25 |
| Monster Beverage | 5 | 2 | 4 | 2 | 3.25 |
| National Beverage | 8 | 3 | 2 | 3 | 4.00 |
| PepsiCo | 4 | 6 | 1 | 7 | 4.50 |
| Keurig Dr Pepper | 3 | 4 | 6 | 5 | 4.50 |
| Celsius | 6 | 8 | 8 | 1 | 5.75 |
| ABInBev | 2 | 7 | 7 | 8 | 6.00 |
| Suntory | 7 | 9 | 5 | 9 | 7.50 |
| Starbucks | 10 | 5 | 10 | 6 | 7.75 |
| Primo Brands | 9 | 10 | 9 | 9 | 9.25 |
Is Monster Beverage a good investment?
Monster Beverage shows good competitive strength and in combination with its strong financial health that makes it a great business to invest in – when the price is right.
Are you interested in other US blue chip stocks that have all the signs of a great business? Then check out our stock analysis of Coca Cola or Adobe.
Disclaimer: The content on this page is for informational and educational purposes only and does not constitute financial, investment, or trading advice. All opinions expressed are solely those of the author. There are risks associated with investing in securities, including the loss of invested capital. Past performance is not a guarantee or predictor of future results. The author is not responsible for any losses incurred as a result of the information provided.