Head-To-Head Analysis: Constellation Brands (NYSE:STZ) vs. Fomento Economico Mexicano (NYSE:FMX)

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 compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

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%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Constellation Brands	$9.76 billion	2.53	$1.69 billion	$11.15	13.06
Fomento Economico Mexicano	$43.86 billion	1.04	$1.08 billion	$5.72	23.13

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 2.8%. Fomento Economico Mexicano pays an annual dividend of $2.31 per share and has a dividend yield of 1.7%. 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 raised 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.

Insider & Institutional Ownership

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

Risk and Volatility

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 Ratings

This is a breakdown of current ratings for Constellation Brands and Fomento Economico Mexicano, as provided 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 presently has a consensus target price of $154.09, indicating a potential upside of 5.83%. Fomento Economico Mexicano has a consensus target price of $142.17, indicating a potential upside of 7.45%. Given Fomento Economico Mexicano’s stronger consensus rating and higher probable upside, analysts clearly believe Fomento Economico Mexicano is more favorable than Constellation Brands.

Summary

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

About Constellation Brands

Constellation Brands is a beverage alcohol company focused on beer, wine and spirits. Its beer portfolio includes Modelo Especial, Corona Extra and Pacifico, which it markets in the United States under its agreement with Grupo Modelo. The company also owns premium wine and spirits brands, including Robert Mondavi Winery and The Prisoner Wine Company. Its products reach consumers primarily in the United States, with operations and distribution extending to other markets. Founded in 1945 as Canandaigua Wine Company in New York, the business grew through brand development and acquisitions before adopting the Constellation Brands name.

About Fomento Economico Mexicano

Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA) is a Mexican company with businesses in beverage production and retail. Its Coca-Cola FEMSA subsidiary produces, markets and distributes Coca-Cola products under franchise agreements, serving customers in Mexico and other Latin American markets. FEMSA also operates OXXO convenience stores and other retail businesses across Latin America. Its activities include pharmacy and fuel retailing, as well as digital and financial services through platforms such as Spin by OXXO.