KOF vs. FMX: Which Stock Should Value Investors Buy Now?
Investors interested in Beverages - Soft drinks stocks are likely familiar with Coca-Cola FEMSA (KOF) and Fomento Economico (FMX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Coca-Cola FEMSA has a Zacks Rank of #2 (Buy), while Fomento Economico has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KOF has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
KOF currently has a forward P/E ratio of 14.22, while FMX has a forward P/E of 26.92. We also note that KOF has a PEG ratio of 1.49. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FMX currently has a PEG ratio of 5.67.
Another notable valuation metric for KOF is its P/B ratio of 1.62. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FMX has a P/B of 1.75.
Based on these metrics and many more, KOF holds a Value grade of A, while FMX has a Value grade of C.
KOF stands above FMX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KOF is the superior value option right now.
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Coca Cola Femsa S.A.B. de C.V. (KOF) : Free Stock Analysis Report
Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report
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