Head to Head Contrast: Fomento Economico Mexicano (NYSE:FMX) & Constellation Brands (NYSE:STZ)

Constellation Brands (NYSE:STZ) and Fomento Economico Mexicano (NYSE:FMX) are both large-cap consumer staples companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

77.3% of Constellation Brands shares are held by institutional investors. Comparatively, 61.0% of Fomento Economico Mexicano shares are held by institutional investors. 12.2% of Constellation Brands shares are held by company insiders. Comparatively, 5.7% of Fomento Economico Mexicano shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Constellation Brands and Fomento Economico Mexicano”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Constellation Brands	$9.76 billion	2.46	$1.69 billion	$11.15	12.72
Fomento Economico Mexicano	$43.86 billion	1.02	$1.08 billion	$5.72	22.68

Constellation Brands has higher earnings, but lower revenue 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.

Dividends

Constellation Brands pays an annual dividend of $4.12 per share and has a dividend yield of 2.9%. Fomento Economico Mexicano pays an annual dividend of $2.31 per share and has a dividend yield of 1.8%. Constellation Brands pays out 37.0% of its earnings in the form of a dividend. Fomento Economico Mexicano pays out 40.4% 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. 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.

Volatility and Risk

Constellation Brands has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, Fomento Economico Mexicano has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Constellation Brands and Fomento Economico Mexicano, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Constellation Brands	4	7	12	0	2.35
Fomento Economico Mexicano	0	4	4	0	2.50

Constellation Brands currently has a consensus target price of $154.09, indicating a potential upside of 8.63%. Fomento Economico Mexicano has a consensus target price of $142.17, indicating a potential upside of 9.59%. Given Fomento Economico Mexicano’s stronger consensus rating and higher probable upside, analysts clearly believe Fomento Economico Mexicano is more favorable than Constellation Brands.

Profitability

This table compares Constellation Brands and Fomento Economico Mexicano’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Constellation Brands	19.57%	24.75%	9.54%
Fomento Economico Mexicano	3.98%	7.71%	2.97%

Summary

Constellation Brands beats Fomento Economico Mexicano on 12 of the 17 factors compared between the two stocks.

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.

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.