Betterware de Mexico S.A.P.I. de C.V. Ordinary Shares (BWMX)

FairStock Score: 78/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $1.7 billion in annual free cash flow (251.0% yield on market cap)
• High return on equity of 83.2% demonstrating efficient capital deployment
• Attractive 6.3% dividend yield providing steady income returns
• FairStock composite score of 78/100 places it in the top tier across value, quality, and momentum factors

Concerns

• High leverage at 3.28x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Betterware de Mexico S.A.P.I. de C.V. Ordinary Shares is a micro-cap consumer cyclical company valued at $665 million. The business generates $14.3 billion in annual revenue with a 2.0% net margin and $1.7 billion in free cash flow. From a quality standpoint, Betterware shows solid Piotroski F-Score of 6/9 and distressed Altman Z-Score of 0.7 warrants caution. On valuation, the stock is attractively valued at 10.9x earnings, with offers a 50% margin of safety vs Graham Number of $35. Growth dynamics show revenue growing at 1.4% and profit growth of 379.1%. The 6.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 78/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Betterware's consistent 83% ROE at just 11x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $1.7 billion in annual free cash flow (251.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 3.3x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer