Ambev (NYSE: ABEV) and Molson Coors Brewing (NYSE:TAP) are both consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitabiliy, valuation and analyst recommendations.

Risk & Volatility

Ambev has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Molson Coors Brewing has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Institutional & Insider Ownership

7.8% of Ambev shares are owned by institutional investors. Comparatively, 76.3% of Molson Coors Brewing shares are owned by institutional investors. 2.5% of Molson Coors Brewing shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Ambev pays an annual dividend of $0.12 per share and has a dividend yield of 2.0%. Molson Coors Brewing pays an annual dividend of $1.64 per share and has a dividend yield of 1.8%. Ambev pays out 50.0% of its earnings in the form of a dividend. Molson Coors Brewing pays out 16.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Ambev and Molson Coors Brewing , as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambev 0 3 2 0 2.40
Molson Coors Brewing 0 4 5 0 2.56

Ambev presently has a consensus price target of $6.20, suggesting a potential upside of 1.31%. Molson Coors Brewing has a consensus price target of $112.56, suggesting a potential upside of 24.36%. Given Molson Coors Brewing ‘s stronger consensus rating and higher possible upside, analysts clearly believe Molson Coors Brewing is more favorable than Ambev.

Earnings & Valuation

This table compares Ambev and Molson Coors Brewing ‘s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ambev $14.50 billion 6.63 $5.82 billion $0.24 25.50
Molson Coors Brewing $8.78 billion 0.21 $1.93 billion $10.01 9.04

Ambev has higher revenue and earnings than Molson Coors Brewing . Molson Coors Brewing is trading at a lower price-to-earnings ratio than Ambev, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ambev and Molson Coors Brewing ‘s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ambev 27.14% 23.24% 13.79%
Molson Coors Brewing 19.78% 7.41% 3.05%

About Ambev

Ambev SA, formerly Inbev Participacoes Societarias SA, is a Brazil-based company engaged in the brewing sector. The Company produces and sells beer, carbonated soft drinks (CSDs) and other non-alcoholic and non-carbonated (NANC) beverages across the Americas. The Company’s activities are divided into three segments: Latin America North, including sell of beer, CSD and NANC drinks in Brazil, as well as operations in Dominican Republic, Saint Vincent, Antigua, Dominica, Guatemala, El Salvador, Nicaragua and Cuba; Latin America South, distributing products in Argentina, Bolivia, Paraguay, Uruguay, Chile, Ecuador, Peru and Colombia, and Canada, represented by Labatt’s operations, which comprises sales in Canada. The Company markets products under various brand names, such as Adriatica, Brahma, Leffe, Budweiser, Corona, PepsiCo and Lipton. It is a subsidiary of Interbrew International BV.

About Molson Coors Brewing

Molson Coors Brewing Company (MCBC) is a holding company. The Company operates as a brewer. The Company’s segments include MillerCoors LLC (United States segment), operating in the United States; Molson Coors Canada (Canada segment), operating in Canada; Molson Coors Europe (Europe segment), operating in Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, Republic of Ireland, Romania, Serbia, the United Kingdom and various other European countries; Molson Coors International (Molson Coors International segment), operating in various other countries, and Corporate. The Company brews, markets, sells and distributes a range of beer brands. The Company offers a portfolio of owned and partner brands, including Carling, Coors Light, Miller Lite, Molson Canadian and Staropramen, as well as craft and specialty beers, such as the Blue Moon Brewing Company brands, the Jacob Leinenkugel Brewing Company brands, Creemore Springs, Cobra and Doom Bar.

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