Mondelez International (NASDAQ:MDLZ) and Fomento Económico Mexicano (NYSE:FMX) are both large-cap consumer staples companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.
Insider and Institutional Ownership
75.1% of Mondelez International shares are owned by institutional investors. Comparatively, 19.1% of Fomento Económico Mexicano shares are owned by institutional investors. 1.3% of Mondelez International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Mondelez International and Fomento Económico Mexicano's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Mondelez International | 11.99% | 13.92% | 5.72% |
Fomento Económico Mexicano | 1.21% | 2.70% | 1.25% |
Dividends
Mondelez International pays an annual dividend of $1.26 per share and has a dividend yield of 2.3%. Fomento Económico Mexicano pays an annual dividend of $1.49 per share and has a dividend yield of 2.1%. Mondelez International pays out 51.0% of its earnings in the form of a dividend. Fomento Económico Mexicano pays out 48.5% 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. Mondelez International has raised its dividend for 8 consecutive years. Mondelez International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Mondelez International has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Fomento Económico Mexicano has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.
Valuation and Earnings
This table compares Mondelez International and Fomento Económico Mexicano's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Mondelez International | $25.87 billion | 2.95 | $3.87 billion | $2.47 | 21.85 |
Fomento Económico Mexicano | $26.33 billion | 0.98 | $1.10 billion | $3.07 | 23.51 |
Mondelez International has higher earnings, but lower revenue than Fomento Económico Mexicano. Mondelez International is trading at a lower price-to-earnings ratio than Fomento Económico Mexicano, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Mondelez International and Fomento Económico Mexicano, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Mondelez International | 0 | 1 | 14 | 0 | 2.93 |
Fomento Económico Mexicano | 1 | 3 | 0 | 0 | 1.75 |
Mondelez International currently has a consensus price target of $63.7143, suggesting a potential upside of 18.08%. Fomento Económico Mexicano has a consensus price target of $75.50, suggesting a potential upside of 4.61%. Given Mondelez International's stronger consensus rating and higher probable upside, equities research analysts clearly believe Mondelez International is more favorable than Fomento Económico Mexicano.
Summary
Mondelez International beats Fomento Económico Mexicano on 12 of the 17 factors compared between the two stocks.