CocaCola (NYSE:KO) and Coca Cola Femsa (NYSE:KOF) Critical Survey

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

Analyst Recommendations

This is a summary of current ratings and target prices for CocaCola and Coca Cola Femsa, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CocaCola	0	0	15	1	3.06
Coca Cola Femsa	1	1	5	0	2.57

CocaCola presently has a consensus target price of $76.93, suggesting a potential upside of 15.41%. Coca Cola Femsa has a consensus target price of $105.00, suggesting a potential upside of 29.60%. Given Coca Cola Femsa’s higher probable upside, analysts clearly believe Coca Cola Femsa is more favorable than CocaCola.

Earnings & Valuation

This table compares CocaCola and Coca Cola Femsa”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CocaCola	$47.06 billion	6.10	$10.63 billion	$2.82	23.64
Coca Cola Femsa	$15.35 billion	8.87	$1.14 billion	$5.71	14.19

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

Risk & Volatility

CocaCola has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Coca Cola Femsa has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Institutional & Insider Ownership

70.3% of CocaCola shares are held by institutional investors. 1.0% of CocaCola shares are held by insiders. Comparatively, 1.0% of Coca Cola Femsa shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares CocaCola and Coca Cola Femsa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CocaCola	25.89%	44.91%	12.23%
Coca Cola Femsa	8.19%	15.81%	7.67%

Dividends

CocaCola pays an annual dividend of $2.04 per share and has a dividend yield of 3.1%. Coca Cola Femsa pays an annual dividend of $3.45 per share and has a dividend yield of 4.3%. CocaCola pays out 72.3% of its earnings in the form of a dividend. Coca Cola Femsa pays out 60.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CocaCola has increased its dividend for 64 consecutive years. Coca Cola Femsa is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

CocaCola beats Coca Cola Femsa on 11 of the 18 factors compared between the two stocks.

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.

About Coca Cola Femsa

Coca-Cola FEMSA, S.A.B. de C.V., a franchise bottler, produces, markets, sells, and distributes Coca-Cola trademark beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Brazil, Argentina, and Uruguay. The company offers sparkling beverages, including colas and flavored sparkling beverages; waters; other non-carbonated beverages comprising juice drinks, coffee, teas, milk, value-added dairy products, sports and energy drinks, and plant-based drinks; and alcoholic beverages, such as hard seltzer under the Topo Chico brand name. It also distributes and sells Heineken, Estrella Galicia, Therezópolis, and Campari beer products, as well as Perfetti confectionary and chewing gum in its Brazilian territories; and Monster products. The company sells its products to distributors, retail outlets, wholesale supermarkets, discount and convenience stores, retailers, points-of-sale outlets, restaurants, bars, stadiums, auditoriums, theaters, and home deliveries. Coca-Cola FEMSA, S.A.B. de C.V. was founded in 1979 and is headquartered in Mexico City, Mexico.