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Coca-Cola FEMSA S.A.B.

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Latin America has been a hot spot for investors. Coca-Cola FEMSA S.A.B. (KOF - Free Report) is expected to post double digit earnings growth in both 2012 and 2013. Since the financial crisis, this Zacks #2 Rank (Buy) has also rewarded its shareholders with dividend increases.

Most investors probably don't realize there is more than one Coke.

Coca-Cola FEMSA is a Mexico-based producer and distributor of Coca-Cola products like Coke, Fanta, Sprite, and Del Valle. It operates 35 bottling facilities and services 1.7 million retailers in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Brazil and Argentina.

Revenue Jumped 29.7% in Q1

On Apr 26, Coca-Cola FEMSA reported its first quarter results and beat the Zacks Consensus Estimate by a penny. Earnings were $1.01 compared to the consensus of $1.00.

Revenue climbed 29.7% to Ps 33,542 million primarily due to double-digit revenue growth in each division and the integration of new territories in Mexico. Excluding the recently integrated territories and revenue still would have increased 21.6%.

Despite rising commodity costs, it still saw top and bottom-line growth in the quarter.

There may be further expansion coming as it has an exclusivity agreement with The Coca-Cola Company regarding the potential acquisition of its bottling operations in the Philippines. It would be the company's first foray out of Latin America.

Double Digit Earnings Growth Expected

The analysts are bullish on 2012 and 2013.

The Zacks Consensus Estimate for 2012 is calling for $5.23 per share. That is earnings growth of 18.8% as the company only earned $4.40 in 2011.

Double digit growth is expected to last as the 2013 Zacks Consensus is looking for $6.16 which would be a rise of 17.9%.

Dividend Rising

As the company's business has expanded, it has been rewarding shareholders.

Coca-Cola FEMSA's dividend of $2.06 is 4 times higher than that paid in 2009. It currently yields 1.8%.

Shares Too Pricey?

Shares have been on fire the last 2 years and are now at 10 year highs. Check out this beautiful chart.

However, Coca-Cola FEMSA now has a forward P/E of 22. That isn't exactly cheap. Even if you account for the double digit earnings growth, it still has a PEG of 1.7. That's in-line with its industry but that doesn't exactly scream "value" either. Shares are not a bargain at these levels.

But for those investors looking for growth and a dividend with exposure to the emerging markets, Coca-Cola FEMSA is one of the few stocks that fit the bill.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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