Fomento Economico Mexicano (NYSE:FMX – Get Free Report) and Constellation Brands (NYSE:STZ – Get Free Report) are both large-cap consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.
Profitability
This table compares Fomento Economico Mexicano and Constellation Brands’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Fomento Economico Mexicano | 3.98% | 7.71% | 2.97% |
| Constellation Brands | 19.57% | 24.75% | 9.54% |
Volatility and Risk
Fomento Economico Mexicano has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Constellation Brands has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500.
Institutional and Insider Ownership
61.0% of Fomento Economico Mexicano shares are held by institutional investors. Comparatively, 77.3% of Constellation Brands shares are held by institutional investors. 5.7% of Fomento Economico Mexicano shares are held by company insiders. Comparatively, 12.2% of Constellation Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent recommendations for Fomento Economico Mexicano and Constellation Brands, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Fomento Economico Mexicano | 0 | 4 | 4 | 0 | 2.50 |
| Constellation Brands | 4 | 7 | 12 | 0 | 2.35 |
Fomento Economico Mexicano currently has a consensus price target of $142.17, suggesting a potential upside of 9.59%. Constellation Brands has a consensus price target of $154.09, suggesting a potential upside of 8.63%. Given Fomento Economico Mexicano’s stronger consensus rating and higher possible upside, equities analysts clearly believe Fomento Economico Mexicano is more favorable than Constellation Brands.
Dividends
Fomento Economico Mexicano pays an annual dividend of $2.31 per share and has a dividend yield of 1.8%. Constellation Brands pays an annual dividend of $4.12 per share and has a dividend yield of 2.9%. Fomento Economico Mexicano pays out 40.4% of its earnings in the form of a dividend. Constellation Brands pays out 37.0% 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. Constellation Brands has increased its dividend for 5 consecutive years. Constellation Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Fomento Economico Mexicano and Constellation Brands”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Fomento Economico Mexicano | $43.86 billion | 1.02 | $1.08 billion | $5.72 | 22.68 |
| Constellation Brands | $9.76 billion | 2.46 | $1.69 billion | $11.15 | 12.72 |
Constellation Brands has lower revenue, but higher earnings than Fomento Economico Mexicano. Constellation Brands is trading at a lower price-to-earnings ratio than Fomento Economico Mexicano, indicating that it is currently the more affordable of the two stocks.
Summary
Constellation Brands beats Fomento Economico Mexicano on 12 of the 17 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 Constellation Brands
Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company provides beer primarily under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook’s California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson’s Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.
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