Comparing CocaCola (NYSE:KO) and Fomento Economico Mexicano (NYSE:FMX)

Fomento Economico Mexicano (NYSE:FMX) and CocaCola (NYSE:KO) are both large-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

Fomento Economico Mexicano has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, CocaCola has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Institutional and Insider Ownership

61.0% of Fomento Economico Mexicano shares are held by institutional investors. Comparatively, 70.3% of CocaCola shares are held by institutional investors. 5.7% of Fomento Economico Mexicano shares are held by insiders. Comparatively, 0.9% of CocaCola shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Fomento Economico Mexicano and CocaCola”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fomento Economico Mexicano	$42.88 billion	0.83	$1.28 billion	$4.47	22.15
CocaCola	$47.06 billion	6.33	$10.63 billion	$2.50	27.68

CocaCola has higher revenue and earnings than Fomento Economico Mexicano. Fomento Economico Mexicano is trading at a lower price-to-earnings ratio than CocaCola, indicating that it is currently the more affordable of the two stocks.

Dividends

Fomento Economico Mexicano pays an annual dividend of $0.51 per share and has a dividend yield of 0.5%. CocaCola pays an annual dividend of $2.04 per share and has a dividend yield of 2.9%. Fomento Economico Mexicano pays out 11.4% of its earnings in the form of a dividend. CocaCola pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CocaCola has raised its dividend for 64 consecutive years. CocaCola is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Fomento Economico Mexicano and CocaCola, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fomento Economico Mexicano	0	3	2	0	2.40
CocaCola	0	1	16	2	3.05

Fomento Economico Mexicano presently has a consensus target price of $106.70, indicating a potential upside of 7.75%. CocaCola has a consensus target price of $76.00, indicating a potential upside of 9.83%. Given CocaCola’s stronger consensus rating and higher possible upside, analysts clearly believe CocaCola is more favorable than Fomento Economico Mexicano.

Profitability

This table compares Fomento Economico Mexicano and CocaCola’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fomento Economico Mexicano	3.98%	7.86%	3.53%
CocaCola	23.00%	45.49%	12.18%

Summary

CocaCola beats Fomento Economico Mexicano on 14 of the 18 factors compared between the two stocks.

About Fomento Economico Mexicano

Fomento Económico Mexicano, S.A.B. de C.V., through its subsidiaries, operates as a bottler of Coca-Cola trademark beverages. The company produces, markets, and distributes Coca-Cola trademark beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, Argentina, and Uruguay. It also operates small-box retail chain stores in Mexico, Colombia, Peru, Chile, and Brazil under the OXXO name; retail service stations for fuels, motor oils, lubricants, and car care products under the OXXO GAS name in Mexico; and drugstores in Chile, Colombia, Ecuador, and Mexico under the Cruz Verde, Fybeca, SanaSana, YZA, La Moderna, and Farmacon names. In addition, the company is involved in the production and distribution of collers, commercial refrigeration equipment, plastic boxes, food processing, and preservation and weighing equipment; and provision of logistic transportation, distribution and maintenance, point-of-sale refrigeration, and plastics solutions, as well as distribution platform for cleaning products and consumables. Further, it operates small-box retail and food convenience chain stores in Switzerland, Germany, Austria, Luxembourg, and the Netherlands under the k kiosk, Brezelkönig, BackWerk, Ditsch, Press & Books, avec, Caffè Spettacolo, and ok.) names, as well as pretzels under the Ditsch name. The company was founded in 1890 and is based in Monterrey, Mexico.

About CocaCola

The Coca-Cola Company, a beverage company, manufactures, markets, and sells various nonalcoholic beverages worldwide. The company provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. It also offers beverage concentrates and syrups, as well as fountain syrups to fountain retailers, such as restaurants and convenience stores. The company sells its products under the Coca-Cola, Diet Coke/Coca-Cola Light, Coca-Cola Zero Sugar, caffeine free Diet Coke, Cherry Coke, Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, Sprite, Sprite Zero Sugar, Simply Orange, Simply Apple, Simply Grapefruit, Fresca, Schweppes, Thums Up, Aquarius, Ayataka, BODYARMOR, Ciel, Costa, Dasani, dogadan, FUZE TEA, Georgia, glacéau smartwater, glacéau vitaminwater, Gold Peak, Ice Dew, I LOHAS, Powerade, Topo Chico, AdeS, Del Valle, fairlife, innocent, Minute Maid, and Minute Maid Pulpy brands. It operates through a network of independent bottling partners, distributors, wholesalers, and retailers, as well as through bottling and distribution operators. The company was founded in 1886 and is headquartered in Atlanta, Georgia.