See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
CocaCola Company (The) (KO) - free report >>
Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CocaCola Company (The) (KO) - free report >>
Fomento Economico Mexicano S.A.B. de C.V. (FMX) - free report >>
Image: Bigstock
FMX or KO: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Beverages - Soft drinks sector might want to consider either Fomento Economico (FMX - Free Report) or Coca-Cola (KO - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Fomento Economico is sporting a Zacks Rank of #2 (Buy), while Coca-Cola has a Zacks Rank of #3 (Hold). This means that FMX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
FMX currently has a forward P/E ratio of 20.20, while KO has a forward P/E of 25.71. We also note that FMX has a PEG ratio of 2.30. 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. KO currently has a PEG ratio of 3.68.
Another notable valuation metric for FMX is its P/B ratio of 1.64. 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, KO has a P/B of 10.24.
These are just a few of the metrics contributing to FMX's Value grade of A and KO's Value grade of D.
FMX stands above KO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FMX is the superior value option right now.