Comparing Ambev (NYSE:ABEV) & Anheuser-Busch Inbev SA (BUD)

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

Insider and Institutional Ownership

7.5% of Ambev shares are held by institutional investors. Comparatively, 5.3% of Anheuser-Busch Inbev SA shares are held by institutional investors. 4.5% of Anheuser-Busch Inbev SA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ambev $14.44 billion 6.78 $5.72 billion $0.24 25.96
Anheuser-Busch Inbev SA $52.42 billion 4.29 $18.90 billion $2.02 57.57

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.

Volatility & Risk

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambev 0 2 2 0 2.50
Anheuser-Busch Inbev SA 1 6 10 0 2.53

Ambev presently has a consensus price target of $6.13, indicating a potential downside of 1.55%. Anheuser-Busch Inbev SA has a consensus price target of $129.75, indicating a potential upside of 11.56%. Given Anheuser-Busch Inbev SA’s stronger consensus rating and higher possible upside, analysts plainly believe Anheuser-Busch Inbev SA is more favorable than Ambev.

Dividends

Ambev pays an annual dividend of $0.12 per share and has a dividend yield of 1.9%. Anheuser-Busch Inbev SA pays an annual dividend of $3.07 per share and has a dividend yield of 2.6%. Ambev pays out 50.0% of its earnings in the form of a dividend. 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. Anheuser-Busch Inbev SA has raised its dividend for 7 consecutive years. Anheuser-Busch Inbev SA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ambev and Anheuser-Busch Inbev SA’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%
Anheuser-Busch Inbev SA 7.37% 13.61% 4.40%

Summary

Anheuser-Busch Inbev SA beats Ambev on 11 of the 17 factors compared between the two stocks.

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 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.

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