AMBEV S A/S (NYSE:ABEV) and Constellation Brands (NYSE:STZ.B) are both large-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Profitability

This table compares AMBEV S A/S and Constellation Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMBEV S A/S 22.07% 23.16% 13.71%
Constellation Brands 38.18% 18.63% 8.09%

Dividends

AMBEV S A/S pays an annual dividend of $0.14 per share and has a dividend yield of 3.4%. Constellation Brands pays an annual dividend of $2.68 per share and has a dividend yield of 1.4%. AMBEV S A/S pays out 60.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and recommmendations for AMBEV S A/S and Constellation Brands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMBEV S A/S 3 1 1 0 1.60
Constellation Brands 0 0 0 0 N/A

AMBEV S A/S currently has a consensus target price of $5.83, suggesting a potential upside of 42.97%. Given AMBEV S A/S’s higher probable upside, analysts clearly believe AMBEV S A/S is more favorable than Constellation Brands.

Earnings and Valuation

This table compares AMBEV S A/S and Constellation Brands’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMBEV S A/S $15.01 billion 4.27 $2.30 billion $0.23 17.74
Constellation Brands $8.33 billion 4.38 $2.32 billion N/A N/A

Constellation Brands has lower revenue, but higher earnings than AMBEV S A/S.

Institutional and Insider Ownership

7.1% of AMBEV S A/S shares are owned by institutional investors. Comparatively, 0.1% of Constellation Brands shares are owned by institutional investors. 96.0% of Constellation Brands shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

AMBEV S A/S has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500. Comparatively, Constellation Brands has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500.

Summary

AMBEV S A/S beats Constellation Brands on 8 of the 14 factors compared between the two stocks.

About AMBEV S A/S

Ambev S.A., through its subsidiaries, produces, distributes, and sells beer, draft beer, carbonated soft drinks (CSD), other non-alcoholic beverages, malt, and food in the Americas. It operates through Latin America North, Latin America South, and Canada segments. The company offers beer primarily under the Skol, Brahma, Antarctic, Brahva, Brahva Gold, Extra, Budweiser, Bud Light, Stella Artois, Corona, Modelo Especial, Beck, Leffe, Hoegaarden, Presidente, Brahma Light, President Light, Bohemia, The One, Quilmes Clásica, Paceña, Taquiña, Huari, Becker, Báltica, Ouro Fino, Pilsen, Patricia, Labatt Blue, Alexander Keith's, Kokanee, Banks, and Deputy brands. It also provides CSD, bottled water, isotonic beverages, energy drinks, coconut water, powdered and natural juices, and ready-to-drink teas under the Guaraná Antarctica, Gatorade, H2OH!, Lipton Iced Tea, Fusion, Do Bem, Pepsi, Canada Dry, Squirt, Red Rock, Pepsi-Cola, Seven Up, and Frutee brands, as well as cereal bars. Ambev S.A. offers its products through a network of third-party distributors and a direct distribution system. The company was founded in 1885 and is headquartered in São Paulo, Brazil. Ambev S.A. is a subsidiary of Interbrew International B.V.

About Constellation Brands

Constellation Brands, Inc. is an international beverage alcohol company. The Company is a producer and marketer of beer, wine and spirits with operations in the United States, Canada, Mexico, New Zealand and Italy. Its segments include Beer, Wine and Spirits, and Corporate Operations and Other. It is a multi-category supplier (beer, wine and spirits) of beverage alcohol in the United States. It sells a number of brands in the import and craft beer categories, including Corona Extra, Corona Light, Modelo Especial, Ballast Point and others. It is a producer and marketer of wine, and sells a number of wine brands across various categories, including table wine, sparkling wine and dessert wine, and across all price points, such as popular, premium and luxury categories. Some of its wine and spirits brands sold in the United States, which comprise its U.S. Focus Brands (Focus Brands) include Meiomi, Robert Mondavi, Wild Horse and others.

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