Compare Coca-Cola FEMSA, S.A.B. de C.V. (KOF) vs The Coca-Cola Company (KO) vs PepsiCo, Inc. (PEP) Stock

Coca-Cola FEMSA, S.A.B. de C.V. (KOF) offers the better valuation at 16.9x trailing P/E (0.9x forward), making it the more compelling value choice. Analysts rate Coca-Cola FEMSA, S.A.B. de C.V. (KOF) a "Buy" — based on 11 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Coca-Cola FEMSA, S.A.B. de C.V. (KOF) is the cheapest at 16.9x versus PepsiCo, Inc. at 28.3x. On forward P/E, Coca-Cola FEMSA, S.A.B. de C.V. is actually cheaper at 0.9x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Coca-Cola FEMSA, S.A.B. de C.V. wins at 0.05x versus PepsiCo, Inc.'s 6.03x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Coca-Cola FEMSA, S.A.B. de C.V. (KOF) delivered a total return of +192.0%, compared to +48.8% for PepsiCo, Inc. (PEP). A $10,000 investment in KOF five years ago would be worth approximately $29K today (assuming dividends reinvested). Over 10 years, the gap is even starker: KO returned +128.4% versus KOF's +84.7%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), The Coca-Cola Company (KO) is the lower-risk stock at 0.04β versus Coca-Cola FEMSA, S.A.B. de C.V.'s 0.29β — meaning KOF is approximately 544% more volatile than KO relative to the S&P 500. On balance sheet safety, Coca-Cola FEMSA, S.A.B. de C.V. (KOF) carries a lower debt/equity ratio of 54% versus 2% for PepsiCo, Inc. — giving it more financial flexibility in a downturn.

The Coca-Cola Company (KO) is the more profitable company, earning 27.3% net margin versus 8.2% for Coca-Cola FEMSA, S.A.B. de C.V. — meaning it keeps 27.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: KO leads at 28.7% versus 12.2% for PEP. At the gross margin level — before operating expenses — KO leads at 61.6%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Coca-Cola FEMSA, S.A.B. de C.V. (KOF) is the more undervalued stock at a PEG of 0.05x versus PepsiCo, Inc.'s 6.03x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Coca-Cola FEMSA, S.A.B. de C.V. (KOF) trades at 0.9x forward P/E versus 25.3x for The Coca-Cola Company — 24.4x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for KO: 3.9% to $84.75.

In this comparison, PEP (3.3% yield), KO (2.5% yield) pay a dividend. KOF does not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, The Coca-Cola Company (KO) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.04), 2.5% yield, +128.4% 10Y return). Both have compounded well over 10 years (KO: +128.4%, KOF: +84.7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Consumer Defensive sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. In terms of investment character: KOF is a mid-cap deep-value stock; KO is a large-cap quality compounder stock; PEP is a large-cap income-oriented stock. KO, PEP pay a dividend while KOF does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.