A Cross-Border Battle With Some Pop

Tickers in this article: KO FMX
NEW YORK ( TheStreet) -- I notice that when I stop by the supermarket here in San Diego there is now a cooler full of sleek, old-style bottles filled with Mexican Coca-Cola.

I like the Mexican version a lot better than the American version. There is just something about an ice-cold glass bottle. In addition to this, the Mexican Coke uses a less refined sugar than American Coke that makes for a sweeter, bolder taste.

Drinking these Mexican Cokes is like going back 40-50 years when the American version came in similar bottles and one needed a bottle opener to pop the lid. That was back when the American version of Coca-Cola's (KO) stock was an aggressive growth stock and the Mexican version, offered by Fomento Economico Mexicano SAB de CV (FMX) , did not exist.

Since then, Atlanta-based Coca-Cola has matured and growth has slowed down considerably for this Dow Jones Industrials member. The company is now a $169 billion firm while the Mexican version is just $35 billion.

Data from Best Stocks Now App

While I like the taste of Mexico-produced Coca-Cola better than American Coca-Cola, which is the better stock?

Let's begin with the performance of the two stocks over the years:

Data from Best Stocks Now App

As you can see, it is virtually no contest. Or should I say no concurso? The Mexican middle-weight has it all over the American heavyweight. Compare the one-, two-, five-, and 10-year performance of these two stocks. $10,000 would have grown to almost $95,000 in pesos in FMX, while the American version delivered a much flatter $21,790.

I know, you have all heard the expression "past performance is no guarantee of future results," but those are some significant numbers. If I am an odds maker on this battle, based on performance the favorite would seem clear.

But what about valuation? I don't like to buy stocks based on performance only. I like all three legs of the stool to be in place: performance, value and a good stock chart. How does the valuation weigh-in stack up?

Data from Best Stocks Now App

Fomento's shares are a bit more expensive than its U. S. counterpart, but then investors have to pay up a bit for superior growth. Fomento's income is expected to grow by 14.3% per year over the next five years while Coke is looking at just 8.2% growth. In fact, the PEG ratio is much more favorable on the Mexican middle-weight contender.

Advantage: FMX.

While the food and beverage sector is not exactly one of the top-ranked sectors in the market right now, I like the fact that Fomento also owns convenience stores. This gives it exposure to the more highly rated consumer and retail sectors.