Head to Head Analysis: Brown Forman (NYSE:BF.A) & Coca Cola Femsa (NYSE:KOF)

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

Risk and Volatility

Coca Cola Femsa has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Brown Forman has a beta of 0.32, indicating that its share price is 68% less volatile than the S&P 500.

Insider and Institutional Ownership

3.8% of Brown Forman shares are held by institutional investors. 1.0% of Coca Cola Femsa shares are held by insiders. Comparatively, 4.1% of Brown Forman shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Coca Cola Femsa and Brown Forman”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coca Cola Femsa	$15.22 billion	12.15	$1.32 billion	$6.34	17.35
Brown Forman	$3.93 billion	3.31	$715.00 million	$1.53	18.53

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

Dividends

Coca Cola Femsa pays an annual dividend of $3.94 per share and has a dividend yield of 3.6%. Brown Forman pays an annual dividend of $0.92 per share and has a dividend yield of 3.2%. Coca Cola Femsa pays out 62.1% of its earnings in the form of a dividend. Brown Forman pays out 60.1% 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.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Coca Cola Femsa and Brown Forman, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coca Cola Femsa	0	5	4	0	2.44
Brown Forman	0	0	0	0	0.00

Coca Cola Femsa presently has a consensus target price of $118.83, suggesting a potential upside of 8.03%. Given Coca Cola Femsa’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Coca Cola Femsa is more favorable than Brown Forman.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Coca Cola Femsa	8.05%	15.83%	7.32%
Brown Forman	18.20%	17.63%	8.78%

Summary

Coca Cola Femsa beats Brown Forman on 9 of the 16 factors compared between the two stocks.

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.

About Brown Forman

Brown-Forman Corporation manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages. It provides spirits, wines, whiskey spirits, whiskey-based flavored liqueurs, ready-to-drink and ready-to-pour products, ready-to-drink cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and liqueurs. The company offers its products primarily under the Jack Daniel's, Woodford Reserve, Canadian Mist, GlenDronach, BenRiach, Glenglassaugh, Old Forester, Early Times, Slane Irish Whiskey, Coopers' Craft, el Jimador, Herradura, New Mix, Pepe Lopez, Antiguo, Finlandia, Korbel Champagne, and Sonoma-Cutrer brands. It is also involved in the sale of used barrels, bulk whiskey, and wine; and provision of contract bottling services. The company serves retail customers and consumers through distributors or state governments; and retailers, wholesalers, and provincial governments directly. It has operations in the United States, the United Kingdom, Germany, Australia, Mexico, and internationally. Brown-Forman Corporation was founded in 1870 and is headquartered in Louisville, Kentucky.