Coca-Cola FEMSA Offers Interesting Value Today And Upside Down The Line

I've made no secret over the years that Fomento Economico Mexicano, S.A.B. De C.V. (FEMSA) (NYSE:FMX) is one of my favorite emerging market companies, as I believe the company has a solid cash-generating business in Coca-Cola FEMSA (NYSE:KOF), exciting growth opportunities on the retail side with its OXXO stores and growing pharmacy business, and significant options with the 20% stake it holds in Heineken (OTCQX:HEINY).

I'm looking at Coca-Cola FEMSA in a little more depth today, though, because I think the valuation here is pretty interesting, there are good growth opportunities on the horizon, and investors may be more comfortable with an emerging markets business anchored by demand for Coca-Cola (NYSE:KO) products rather than a more speculative retailing-based growth story. I believe Coca-Cola FEMSA is priced to generate low-to-mid double-digit total annual returns at today's price, with potential earnings upside tied to economic recoveries in major markets, improved performance in Brazil, and expansion into other bottling markets.

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Coca-Cola FEMSA Offers Interesting Value Today And Upside Down The Line