Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Fundamental Analysis: Bull vs. Bear Case

FMX

Fomento Económico Mexicano, S.A.B. de C.V.

Fundamental data last updated:September 28, 2026

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company profile

SECTOR

Consumer Defensive

industry

Beverages - Alcoholic

Exchange

NYSE

County of HQ

MX

Next Earnings Date

Pending Announcement

Business Summary

Fomento Económico Mexicano, S.A.B. de C.V., through its subsidiaries, operates as a bottler of Coca-Cola trademark beverages. The company produces, markets, and distributes Coca-Cola trademark beverages in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil, Argentina, and Uruguay. It also operates small-box retail chain stores in Mexico, Colombia, Peru, Chile, and Brazil under the OXXO name; retail service stations for fuels, motor oils, lubricants, and car care products under the OXXO GAS name in Mexico; and drugstores in Chile, Colombia, Ecuador, and Mexico under the Cruz Verde, Fybeca, SanaSana, YZA, La Moderna, and Farmacon names. In addition, the company is involved in the production and distribution of chillers, commercial refrigeration equipment, plastic boxes, food processing, and preservation and weighing equipment; and provision of logistic transportation, distribution and maintenance, point-of-sale refrigeration, and plastics solutions, as well as distribution platform for cleaning products and consumables. As of December 31, 2021, it operated 20,431 OXXO stores; 3,652 drugstores; and 567 OXXO GAS service stations. Fomento Económico Mexicano, S.A.B. de C.V. was founded in 1890 and is based in Monterrey, Mexico.

VALUATION

P/E

14.13 Market Cap ($M USD)

$40.91B

Forward P/E

0.87 PEG

0.00 PRICE TO SALES

1.00 PRICE TO BOOK

3.32 EV / EBITDA

11.19 5-Year Average P/E

Free Cash Flow Yield

3.39%

DCF Value

$100.93

Graham Number

$109.44

Price to FCF

29.53 EV to FCF

34.73 Earnings Yield

4.08%

FCF Yield

3.39%

DIVIDEND

Yield

5.07%

Annual Payout

$10.55

Payout Ratio

175.40%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$8.50

Next Year EPS Growth Estimate

$138.68

Next Year Revenue Growth Estimate

$1.30T

Return on Equity (ROE)

12.11%

FREE CASH FLOW

Operating Margin

8.52%

Debt-to-Equity

1.05 Piotroski F-Score

8 Altman Z-Score

20.48 Return on Invested Capital (ROIC)

12.79%

Current Ratio

1.16 Quick Ratio

0.87 Net Debt to EBITDA

1.67 Interest Coverage

3.88 Gross Profit margin

40.66%

FCF PER SHARE

$8.67

REVENUE PER SHARE

$254.85

Gainseekers Quantitative Analysis

Summary

FMX appears to be a compelling opportunity for value investors, with its market price trading significantly below its DCF value. The Forward P/E ratio of 0.87 suggests the market is underestimating future earnings potential, while the Altman Z-score of 20.01 indicates robust financial health, minimizing bankruptcy risk. Despite a high payout ratio, the earnings yield of 4.08% and a strong Piotroski F-Score of 8 highlight operational efficiency and profitability. The Graham Number also supports the notion that the stock is undervalued, suggesting a potential upside for investors.

AI Exposure / Tech Reliance

Operating in the Consumer Defensive sector, FMX is well-positioned to leverage AI and modern technology to enhance supply chain efficiencies and customer engagement. The beverage industry can benefit from AI-driven demand forecasting and personalized marketing strategies. FMX's adaptability to these technological shifts could bolster its competitive edge.

The Bull Case

For GARP investors, FMX offers an attractive proposition with a solid ROIC of 12.79%, indicating effective capital allocation. The Piotroski F-Score of 8 underscores strong financial health, while a gross profit margin of 40.65% reflects significant pricing power. Despite a modest FCF yield of 3.38%, the company's ability to generate cash flow and maintain operational efficiency makes it a compelling buy.

The Bear Case

However, FMX is not without its risks. The Price/Book ratio of 3.32 and Price/Sales ratio of 1.01 suggest the stock might be overvalued relative to its book and sales values. Additionally, the stock's proximity to its 52-week high raises concerns about potential overextension. The high payout ratio of 175.40% could also strain future dividend sustainability, posing a risk to income-focused investors.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$132.00

Institutional Ownership %

1-Year Beta

0.19 Insider Buying % (6 Mo)

Distance to 52-Week High

4.70%

Distance to 52-Week Low

30.81%

EARNINGS SURPRISE %

41.54%

50-DAY SMA

$115.89

200-DAY SMA

$103.30

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.