Company Overview
Coca-Cola FEMSA, S.A.B. de C.V. operates as a franchise bottler dedicated to the production, marketing, sale, and distribution of beverages bearing the Coca-Cola trademark across Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Brazil, Argentina, and Uruguay. The firm functions within the Consumer Defensive sector, specifically focusing on the Beverages - Non-Alcoholic industry, which implies a business model characterized by resilient demand patterns and defensive attributes during economic downturns. As of the latest reporting period, the company holds a market capitalization of $20.08B and generates annual revenue of $291.75B, while employing a workforce of 93000 individuals. These aggregate figures, particularly the massive $291.75B in revenue, indicate that the entity functions as a dominant market leader with significant operational scale and substantial market penetration across multiple Latin American jurisdictions.
Financial Health
The company reported revenue of $291.75B for the trailing twelve months, generating net income of $23.84B and EBITDA of $51.55B during the same period. The substantial disparity between the $291.75B revenue and the $23.84B net income reveals a cost structure where operating expenses, including cost of goods sold and general administrative costs, consume approximately 91.8% of total sales before interest and taxes. Free cash flow stands at $1.80B, a figure that represents the cash remaining after accounting for capital expenditures and operating expenses, indicating the level of financial flexibility available for debt repayment or strategic initiatives. The gross margin is recorded at 45.6%, suggesting a high pricing power or efficiency in the cost of goods sold relative to sales revenue. The operating margin sits at 13.4%, reflecting the efficiency of core business operations before interest and taxes, while the profit margin of 8.2% demonstrates the final profitability after all expenses, interest, and taxes are deducted. On the liability side, the company holds $28.20B in cash against $85.51B in debt, resulting in a debt-to-equity ratio of 55.52, which suggests a leveraged balance sheet typical for capital-intensive franchise operations. Liquidity is assessed via a current ratio of 1.12, indicating that current assets slightly exceed current liabilities, providing a modest buffer for short-term obligations. Return on Equity is 16.4%, showing the effectiveness of management in generating profits from shareholder equity, while Return on Assets is 7.8%, reflecting the overall efficiency of the company's asset base in generating earnings.
Valuation Assessment
The trailing P/E ratio is 14.98, whereas the forward P/E is 10.63, a difference that implies the market expects earnings to grow significantly in the coming year to justify the lower forward multiple. The price-to-book ratio is 2.49, indicating that the market values the company at a premium of roughly 149% over its book value, reflecting intangible assets and franchise value not captured on the balance sheet. Alternative valuation metrics such as the price-to-sales ratio of 0.07 and the EV/EBITDA of 5.16 suggest the stock is priced relatively low relative to its sales volume and enterprise value adjusted for earnings. The 52-week high is $116.36 and the 52-week low is $80.22, providing a range within which the stock has traded over the last year. The beta value is 0.48, which signifies that the stock's price volatility is less than half that of the broader market, indicating it behaves as a defensive asset with lower sensitivity to market fluctuations.
Growth & Income
Revenue growth stands at 2.4% year-over-year, while earnings growth is recorded at 3.0% year-over-year, meaning earnings are expanding at a faster rate than revenue. This divergence implies that the company is successfully leveraging operational efficiencies or margin expansion to boost profitability faster than top-line sales are increasing. As a dividend payer, the company offers a dividend yield of 4.2% with a payout ratio of 78.0%. The payout ratio of 78.0% is sustainable given the strong net income of $23.84B, though it leaves limited room for error should earnings growth stagnate. The overall growth and income profile combines modest top-line expansion with robust earnings growth and a high-yielding dividend, positioning the stock as a value-oriented income play within the consumer defensive sector.