Anheuser-Busch Inbev SA (NYSE: BUD) and Ambev (NYSE:ABEV) are both large-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional & Insider Ownership

5.3% of Anheuser-Busch Inbev SA shares are held by institutional investors. Comparatively, 7.7% of Ambev shares are held by institutional investors. 4.5% of Anheuser-Busch Inbev SA shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Anheuser-Busch Inbev SA and Ambev’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anheuser-Busch Inbev SA 7.37% 13.61% 4.40%
Ambev 27.14% 23.24% 13.79%

Analyst Ratings

This is a summary of recent ratings and price targets for Anheuser-Busch Inbev SA and Ambev, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anheuser-Busch Inbev SA 1 6 10 0 2.53
Ambev 0 3 2 0 2.40

Anheuser-Busch Inbev SA presently has a consensus target price of $129.75, suggesting a potential upside of 12.03%. Ambev has a consensus target price of $6.20, suggesting a potential upside of 1.31%. Given Anheuser-Busch Inbev SA’s stronger consensus rating and higher possible upside, analysts clearly believe Anheuser-Busch Inbev SA is more favorable than Ambev.

Earnings and Valuation

This table compares Anheuser-Busch Inbev SA and Ambev’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Anheuser-Busch Inbev SA $52.42 billion 4.27 $18.90 billion $2.02 57.34
Ambev $14.44 billion 6.66 $5.72 billion $0.24 25.50

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

Dividends

Anheuser-Busch Inbev SA pays an annual dividend of $3.07 per share and has a dividend yield of 2.7%. Ambev pays an annual dividend of $0.12 per share and has a dividend yield of 2.0%. Anheuser-Busch Inbev SA pays out 152.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ambev pays out 50.0% of its earnings in the form of a dividend. Ambev has increased its dividend for 7 consecutive years.

Risk and Volatility

Anheuser-Busch Inbev SA has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Ambev has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Summary

Anheuser-Busch Inbev SA beats Ambev on 10 of the 17 factors compared between the two stocks.

About Anheuser-Busch Inbev SA

Anheuser Busch Inbev NV (AB InBev) is a Belgium-based company engaged in the brewers industry. The Company owns a portfolio of over 200 beer brands. The Company’s brand portfolio includes global brands, such as Budweiser, Corona and Stella Artois; international brands, including Beck’s, Leffe and Hoegaarden, and local champions, such as Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Cass and Jupiler. The Company’s soft drinks business consists of both own production and agreements with PepsiCo related to bottling and distribution arrangements between its various subsidiaries and PepsiCo. Ambev, which is a subsidiary of the Company, is a PepsiCo bottler. Brands that are distributed under these agreements are Pepsi, 7UP and Gatorade.

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.

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