Critical Review: Monster Beverage (MNST) versus Coca-Cola FEMSA (KOF)

Monster Beverage (NASDAQ: MNST) and Coca-Cola FEMSA (NYSE:KOF) are both large-cap consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Earnings & Valuation

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This table compares Monster Beverage and Coca-Cola FEMSA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monster Beverage $3.37 billion 9.62 $820.67 million $1.46 39.18
Coca-Cola FEMSA $10.81 billion 1.27 -$678.50 million $3.26 20.38

Monster Beverage has higher earnings, but lower revenue than Coca-Cola FEMSA. Coca-Cola FEMSA is trading at a lower price-to-earnings ratio than Monster Beverage, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Monster Beverage has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Coca-Cola FEMSA has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Profitability

This table compares Monster Beverage and Coca-Cola FEMSA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monster Beverage 24.36% 22.54% 18.21%
Coca-Cola FEMSA -6.34% 11.29% 5.35%

Dividends

Coca-Cola FEMSA pays an annual dividend of $1.75 per share and has a dividend yield of 2.6%. Monster Beverage does not pay a dividend. Coca-Cola FEMSA pays out 53.7% of its earnings in the form of a dividend.

Institutional & Insider Ownership

65.4% of Monster Beverage shares are owned by institutional investors. Comparatively, 6.6% of Coca-Cola FEMSA shares are owned by institutional investors. 9.4% of Monster Beverage shares are owned by insiders. Comparatively, 1.0% of Coca-Cola FEMSA shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Monster Beverage and Coca-Cola FEMSA, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monster Beverage 1 1 11 0 2.77
Coca-Cola FEMSA 0 4 2 0 2.33

Monster Beverage currently has a consensus target price of $66.69, indicating a potential upside of 16.57%. Coca-Cola FEMSA has a consensus target price of $106.00, indicating a potential upside of 59.57%. Given Coca-Cola FEMSA’s higher possible upside, analysts plainly believe Coca-Cola FEMSA is more favorable than Monster Beverage.

Summary

Monster Beverage beats Coca-Cola FEMSA on 12 of the 16 factors compared between the two stocks.

Monster Beverage Company Profile

Monster Beverage Corporation is a holding company. The Company develop, market, sell and distribute alternative beverage category beverages under the brand names of Monster Energy, Monster Rehab, Monster Energy Extra Strength Nitrous Technology, Java Monster, X-Presso Monster, Muscle Monster, Punch Monster, Hansen’s, Hansen’s Natural Cane Soda, Junior Juice, Blue Sky, Hubert’s, Worx Energy and Peace Tea. The company has two segments, Direct Store Delivery (DSD), whose principal products comprise energy drinks, and Warehouse (Warehouse), whose principal products comprise juice-based and soda beverages. The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily direct to retailers.

Coca-Cola FEMSA Company Profile

Coca-Cola FEMSA, S.A.B. de C.V., a franchise bottler, produces, markets, distributes, and sells Coca-Cola trademark beverages. The company offers a portfolio of products, including sparkling beverages, still beverages, juices, sports, and energy drinks, as well as teas, waters, isotonics, and dairy products. It provides a portfolio of approximately 154 brands directly, as well as through retail outlets and restaurants to consumers in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, and Argentina. The company was founded in 1979 and is headquartered in Mexico City, Mexico.

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