Coca Cola Femsa S.A.B. de C.V. American Depositary Shares each representing 10 Units (each Unit consists of 3 Series B Shares and 5 Series L Shares) (KOF)

FairStock Score: 38/100 — MIXED

Key Financials

Strengths

• Generates $1.8 billion in annual free cash flow (8.4% yield on market cap)
• Solid return on equity of 16.4% above cost of capital
• Attractive 4.0% dividend yield providing steady income returns
• Established organization with 93,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($36) with negative 185% margin of safety—limited downside protection
• Anemic revenue growth of 2.4% for a company of this size limits long-term upside
• Altman Z-Score of 1.0 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Coca Cola Femsa S.A.B. de C.V. American Depositary Shares each representing 10 Units (each Unit consists of 3 Series B Shares and 5 Series L Shares) is a mid-cap consumer defensive company valued at $21.4 billion. The business generates $291.7 billion in annual revenue with a 0.1% net margin and $1.8 billion in free cash flow. From a quality standpoint, Coca shows solid Piotroski F-Score of 6/9 and distressed Altman Z-Score of 1.0 warrants caution. On valuation, the stock is commanding a steep 124.2x multiple, with trades far above its Graham Number ($36) with no margin of safety. Growth dynamics show revenue growing at 2.4% and profit growth of 3.0%. The 4.0% dividend yield adds an income component for patient holders. Our composite FairStock Score of 43/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $1.8 billion in annual free cash flow (8.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 124x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Sluggish 2% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

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