Reed's (NYSE: REED) and Fomento Economico Mexicano S.A.B. de C.V. (NYSE:FMX) are both non-cyclical consumer goods & services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitabiliy, valuation, earnings and dividends.

Dividends

Fomento Economico Mexicano S.A.B. de C.V. pays an annual dividend of $1.32 per share and has a dividend yield of 1.4%. Reed's does not pay a dividend. Fomento Economico Mexicano S.A.B. de C.V. pays out 48.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Reed's and Fomento Economico Mexicano S.A.B. de C.V., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reed's 0 0 2 0 3.00
Fomento Economico Mexicano S.A.B. de C.V. 0 1 3 0 2.75

Reed's presently has a consensus target price of $6.75, indicating a potential upside of 170.00%. Fomento Economico Mexicano S.A.B. de C.V. has a consensus target price of $92.00, indicating a potential downside of 4.67%. Given Reed's’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Reed's is more favorable than Fomento Economico Mexicano S.A.B. de C.V..

Valuation & Earnings

This table compares Reed's and Fomento Economico Mexicano S.A.B. de C.V.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Reed's $40.76 million 0.86 -$2.73 million N/A N/A
Fomento Economico Mexicano S.A.B. de C.V. $22.94 billion 1.51 $2.82 billion $2.71 35.61

Fomento Economico Mexicano S.A.B. de C.V. has higher revenue and earnings than Reed's.

Profitability

This table compares Reed's and Fomento Economico Mexicano S.A.B. de C.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Reed's -24.03% N/A -44.29%
Fomento Economico Mexicano S.A.B. de C.V. 5.59% 8.59% 4.57%

Institutional and Insider Ownership

24.0% of Fomento Economico Mexicano S.A.B. de C.V. shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Fomento Economico Mexicano S.A.B. de C.V. beats Reed's on 9 of the 12 factors compared between the two stocks.

Reed's Company Profile

Reed’s, Inc. develops, manufactures, markets and sells natural non-alcoholic carbonated soft drinks, Kombucha, candies and ice creams. The Company manufactures, licenses, markets and sells several product lines, such as Reed’s Ginger Brews; Virgil’s Root Beer, Cream Sodas, Dr. Better and Real Cola, including ZERO diet sodas; Culture Club Kombucha; China Colas; Reed’s Ginger candy and ice creams, and Sonoma Sparkler and other juice based products. The Company sells its products throughout the United States and in select international markets. It sells products through a network of natural, gourmet and beer distributors and direct to certain large national retailers. The Company also has private label business. The Company manufactures and sells beverages and candies or other ginger related products. The Company produces carbonated beverages in multiple facilities, including a facility in Los Angeles, California, known as The Brewery.

Fomento Economico Mexicano S.A.B. de C.V. Company Profile

Fomento Economico Mexicano, S.A.B. de C.V. (FEMSA) is a holding company. The Company’s segments are Coca-Cola FEMSA, FEMSA Comercio-Retail Division and FEMSA Comercio-Fuel Division. The Company conducts its operations through holding companies, such as Coca-Cola FEMSA, S.A.B. de C.V. and subsidiaries (Coca-Cola FEMSA), which produces, distributes and sells beverages; FEMSA Comercio, S.A. de C.V. and subsidiaries (FEMSA Comercio), which consists of a Retail Division operating various small-format chain stores, and CB Equity LLP, which holds its equity investment in Heineken N.V., and Heineken Holding N.V. The Company’s Coca-Cola FEMSA produces, markets, sells and distributes Coca-Cola trademark beverages through standard bottler agreements in certain territories in the countries, in which it operates. Coca-Cola FEMSA also sells bottled water products. FEMSA participates in the retail sector primarily through FEMSA Comercio.

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