Head-To-Head Contrast: Reeds (NASDAQ:REED) vs. Coca-Cola FEMSA (NASDAQ:KOF)

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Reeds (NASDAQ:REED) and Coca-Cola FEMSA (NYSE:KOF) are both consumer staples companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reeds 0 0 2 0 3.00
Coca-Cola FEMSA 0 2 2 0 2.50

Reeds currently has a consensus price target of $5.00, suggesting a potential upside of 38.12%. Coca-Cola FEMSA has a consensus price target of $71.50, suggesting a potential upside of 10.27%. Given Reeds’ stronger consensus rating and higher possible upside, analysts clearly believe Reeds is more favorable than Coca-Cola FEMSA.

Valuation and Earnings

This table compares Reeds and Coca-Cola FEMSA’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Reeds $38.10 million 3.18 -$10.32 million ($0.38) -9.53
Coca-Cola FEMSA $9.50 billion 1.43 $709.00 million $2.71 23.93

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

Profitability

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

Net Margins Return on Equity Return on Assets
Reeds -31.29% N/A -68.56%
Coca-Cola FEMSA 7.33% 8.41% 4.05%

Volatility & Risk

Reeds has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Coca-Cola FEMSA has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Dividends

Coca-Cola FEMSA pays an annual dividend of $1.86 per share and has a dividend yield of 2.9%. Reeds does not pay a dividend. Coca-Cola FEMSA pays out 68.6% of its earnings in the form of a dividend.

Institutional and Insider Ownership

26.1% of Reeds shares are owned by institutional investors. Comparatively, 7.2% of Coca-Cola FEMSA shares are owned by institutional investors. 45.4% of Reeds shares are owned by company insiders. Comparatively, 1.0% of Coca-Cola FEMSA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Coca-Cola FEMSA beats Reeds on 8 of the 15 factors compared between the two stocks.

Reeds Company Profile

Reed's, Inc. develops, manufactures, markets, and sells natural hand-crafted beverages and candies in the United States, Canada, Asia, Europe, Australia, and South America. Its products include Reed's ginger beers; Virgil's root beer and cream sodas; Flying Cauldron Butterscotch Beer; and Sonoma Sparkler branded sparkling juices. The company also provides private label products. Reed's, Inc. sells its products to specialty gourmet, natural food stores, retail stores, convenience stores, and restaurants through distributors and independent distributor partners, as well as directly. The company was formerly known as Original Beverage Corporation and changed its name to Reed's, Inc. in 2001. Reed's, Inc. was founded in 1987 and is based in Los Angeles, California.

Coca-Cola FEMSA Company Profile

Coca-Cola FEMSA, S.A.B. de C.V., a franchise bottler, produces, markets, sells, and distributes Coca-Cola trademark beverages. The company offers sparkling beverages, including colas and flavored sparkling beverages; and waters and still beverages, such as juice drinks, coffee, teas, milk, value-added dairy, sports drinks, energy drinks, and plant-based drinks. It provides a portfolio of 131 brands through retail outlets, such as wholesale supermarkets, discount stores, and convenience stores; sidewalk stands, restaurants, bars, and various types of dispensing machines, as well as point-of-sale programs in stadiums, concert halls, auditoriums, and theaters; home delivery; and other locations. The company operates in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Brazil, Argentina, Venezuela, and Uruguay. Coca-Cola FEMSA, S.A.B. de C.V. was founded in 1979 and is headquartered in Mexico City, Mexico.

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