Coca Cola Femsa Sab De Cv (KOF)

Price$110.62Cached quoteAs of 2026-09-10 20:53 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because quality is strong, but the cash return is only moderate.

After adjusting correctly for the depositary-share structure, the market valuation is about 17 times recent earnings. Using the supplied 2024 figures, free cash flow, meaning cash left after running and investing in the business, was about 18.5 billion pesos, giving roughly a 4.6% cash yield at the observed valuation. The ordinary dividend offers roughly a 4% pre-tax yield. Those returns are respectable rather than unusually cheap, so today's price still requires continued earnings growth and resilient margins.

Big pictureProfit has grown faster than sales, while cash generation has stayed positive through heavy investment.

From 2019 through 2024, revenue rose from 194.5 billion to 279.8 billion pesos, about 7.5% annual growth, while net income nearly doubled from 12.1 billion to 23.7 billion pesos. Operating cash flow increased from 31.3 billion to 42.4 billion pesos. Cash generation was durable even when 2020 revenue declined. The main constraint is investment intensity: capital spending climbed to 23.9 billion pesos in 2024, leaving free cash flow below its 2020-2021 peaks despite much higher earnings.

Business strengthDebt is manageable, dilution is minimal, and dividends have risen without exhausting cash generation.

At the end of 2024, Coca-Cola FEMSA held 32.8 billion pesos of cash against 72.3 billion of debt, leaving net debt of about 39.5 billion pesos, modest beside 279.8 billion of annual revenue and 143.4 billion of equity. Current assets of 75.1 billion also exceeded current liabilities of 67.2 billion. Reported shares outstanding were essentially unchanged over the supplied history, while stock compensation was only 369 million pesos in 2024. Dividends consumed about 69% of that year's free cash flow.

What could change the storyMexico's beverage tax and future volume trends will decide whether today's valuation proves too high or low.

The strongest bull case is that Coca-Cola FEMSA keeps using pricing, product mix and its distribution scale to protect earnings while recent investment expands capacity and efficiency. That could lift free cash flow materially above the roughly 18.5 billion pesos generated in 2024 and make today's earnings multiple attractive. The bear case is more specific: Mexico's higher beverage taxes could produce persistent volume weakness while capital spending stays elevated. If cash generation fails to recover despite higher nominal revenue, the present valuation would offer too little downside protection.

AI: News

Second-quarter resilienceSecond-quarter results showed pricing still cushioning weaker Mexican demand, supporting confidence in near-term earnings resilience.

Coca-Cola FEMSA's July 2026 second-quarter release covered operations after several months under Mexico's higher beverage taxes. Mexican volume remained an important pressure point, but fewer unit cases did not translate into a comparable collapse in consolidated revenue or earnings because pricing and product mix provided an offset. That matters to valuation because the current price assumes the bottler can preserve peso earnings while consumers adjust. The results supported that assumption, although one quarter does not establish that volumes have stabilized.

Mexico beverage tax risesHigher Mexican beverage taxes raised the cost of key products and increased the risk of lasting volume pressure.

Mexico's fiscal changes for 2026 materially increased the tax burden on Coca-Cola FEMSA's core market. The excise tax on sugar-sweetened beverages rose to 3.0818 pesos per liter, while beverages using non-caloric sweeteners became subject to a 1.50-peso-per-liter charge. The mechanism is direct: higher taxes can require retail price increases, reduce consumer demand, or compress bottler economics if costs cannot be fully passed through. Persistent Mexican volume weakness would therefore weaken one of the main assumptions supporting today's valuation.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	$291.75B	$279.79B	$245.09B	$226.74B	$194.80B	$183.62B	$194.47B	$182.34B	$183.26B	$177.72B	$152.36B
Gross profit	$133.18B	$128.74B	$110.86B	$100.30B	$88.60B	$82.81B	$87.51B	$83.94B	$83.51B	$79.66B	$72.03B
Gross margin	45.65%	46.01%	45.23%	44.24%	45.48%	45.10%	45.00%	46.03%	45.57%	44.82%	47.28%
Operating expenses	$92.56B	$89.00B	$76.51B	$69.67B	—	—	—	—	—	—	—
Operating income	$40.62B	$39.73B	$34.35B	$30.64B	—	—	—	—	—	—	—
Operating margin	13.92%	14.20%	14.01%	13.51%	—	—	—	—	—	—	—
EBITDA	$56.07B	$52.85B	$43.82B	$40.45B	—	—	—	—	—	—	—
EBITDA margin	19.22%	18.89%	17.88%	17.84%	—	—	—	—	—	—	—
Net income	$23.84B	$24.55B	$20.23B	$19.63B	$16.33B	$10.37B	$12.63B	$15.07B	−$11.65B	$10.53B	$10.33B
Net profit margin	8.17%	8.77%	8.25%	8.66%	8.38%	5.65%	6.49%	8.26%	−6.36%	5.92%	6.78%
Basic EPSper basic share	MX$14.20	MX$1.41	MX$1.16	MX$1.13	MX$0.93	MX$0.61	MX$0.72	MX$0.65	-MX$0.77	MX$0.61	MX$0.62
Diluted EPSper diluted share	MX$14.20	MX$1.41	MX$1.16	MX$1.13	MX$0.93	MX$0.61	MX$0.72	MX$0.65	-MX$0.77	MX$0.61	MX$0.62