Analyzing Coca-Cola FEMSA (KOF) and Pepsico (PEP)
Coca-Cola FEMSA (NYSE: KOF) and Pepsico (NASDAQ:PEP) are both large-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.
Institutional and Insider Ownership
6.7% of Coca-Cola FEMSA shares are owned by institutional investors. Comparatively, 70.2% of Pepsico shares are owned by institutional investors. 1.0% of Coca-Cola FEMSA shares are owned by insiders. Comparatively, 0.3% of Pepsico shares are owned 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 Coca-Cola FEMSA and Pepsico’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Coca-Cola FEMSA||$9.54 billion||1.56||$488.00 million||$3.41||21.01|
|Pepsico||$62.80 billion||2.66||$6.33 billion||$4.84||24.25|
Pepsico has higher revenue and earnings than Coca-Cola FEMSA. Coca-Cola FEMSA is trading at a lower price-to-earnings ratio than Pepsico, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Coca-Cola FEMSA has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Pepsico has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.
Coca-Cola FEMSA pays an annual dividend of $1.75 per share and has a dividend yield of 2.4%. Pepsico pays an annual dividend of $3.22 per share and has a dividend yield of 2.7%. Coca-Cola FEMSA pays out 51.3% of its earnings in the form of a dividend. Pepsico pays out 66.5% 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.
This table compares Coca-Cola FEMSA and Pepsico’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and recommmendations for Coca-Cola FEMSA and Pepsico, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Coca-Cola FEMSA presently has a consensus target price of $106.00, suggesting a potential upside of 47.92%. Pepsico has a consensus target price of $122.33, suggesting a potential upside of 4.22%. Given Coca-Cola FEMSA’s higher possible upside, equities research analysts clearly believe Coca-Cola FEMSA is more favorable than Pepsico.
Pepsico beats Coca-Cola FEMSA on 12 of the 16 factors compared between the two stocks.
About Coca-Cola FEMSA
Coca-Cola FEMSA, S.A.B. de C.V. is a franchise bottler of Coca-Cola trademark beverages across the world. The Company and its subsidiaries are engaged in the production, distribution and marketing of certain Coca-Cola beverages. It is also engaged in acquiring, holding and transferring all types of bonds, shares and marketable securities. The Company’s segments include Mexico and Central America division, which comprises Mexico (including corporate operations), Guatemala, Nicaragua, Costa Rica and Panama; the South America division, which consists of Brazil, Argentina and Colombia; Venezuela, which operates in an economy with exchange control and hyper-inflation, and the Asian division, which consists of the Company’s equity method investment in Coca-Cola FEMSA Philippines, Inc. The Coca-Cola trademark beverages include sparkling beverages (colas and flavored sparkling beverages), waters and still beverages (including juice drinks, coffee, teas, milk, dairy and isotonic drinks).
PepsiCo, Inc. is a global food and beverage company. The Company’s portfolio of brands includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. The Company operates through six segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), North America Beverages (NAB), Latin America, Europe Sub-Saharan Africa (ESSA), and Asia, Middle East and North Africa (AMENA). The FLNA segment includes its branded food and snack businesses in the United States and Canada. The QFNA segment includes its cereal, rice, pasta and other branded food businesses in the United States and Canada. The NAB segment includes its beverage businesses in the United States and Canada. The Latin America segment includes its beverage, food and snack businesses in Latin America. The ESSA segment includes its beverage, food and snack businesses in Europe and Sub-Saharan Africa. The AMENA segment includes its beverage, food and snack businesses in Asia, Middle East and North Africa.
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