Analyzing Ambev (NYSE:ABEV) and Anheuser-Busch InBev SA/NV (NYSE:BUD)

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

Dividends

Ambev pays an annual dividend of $0.03 per share and has a dividend yield of 1.1%. Anheuser-Busch InBev SA/NV pays an annual dividend of $1.41 per share and has a dividend yield of 1.7%. Ambev pays out 15.8% of its earnings in the form of a dividend. Anheuser-Busch InBev SA/NV pays out 28.2% 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.

Earnings & Valuation

This table compares Ambev and Anheuser-Busch InBev SA/NV”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambev	$15.80 billion	2.70	$2.78 billion	$0.19	14.24
Anheuser-Busch InBev SA/NV	$63.99 billion	2.65	$6.84 billion	$5.00	16.80

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

Analyst Ratings

This is a summary of recent ratings for Ambev and Anheuser-Busch InBev SA/NV, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambev	2	4	0	0	1.67
Anheuser-Busch InBev SA/NV	0	4	12	0	2.75

Ambev currently has a consensus price target of $3.01, indicating a potential upside of 11.18%. Anheuser-Busch InBev SA/NV has a consensus price target of $87.83, indicating a potential upside of 4.54%. Given Ambev’s higher possible upside, analysts clearly believe Ambev is more favorable than Anheuser-Busch InBev SA/NV.

Institutional & Insider Ownership

8.1% of Ambev shares are owned by institutional investors. Comparatively, 5.5% of Anheuser-Busch InBev SA/NV shares are owned by institutional investors. 4.5% of Anheuser-Busch InBev SA/NV shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Ambev has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Anheuser-Busch InBev SA/NV has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ambev	18.47%	17.48%	11.14%
Anheuser-Busch InBev SA/NV	14.90%	16.42%	7.47%

About Ambev

Ambev S.A., through its subsidiaries, engages in the production, distribution, and sale of beer, draft beer, carbonated soft drinks, malt and food, other alcoholic beverages, and non-alcoholic and non-carbonated products in Brazil, Central America and Caribbean, Latin America South, and Canada. It offers beer primarily under the Skol, Brahma, Antarctica, Brahva, Budweiser, Bud Light, Beck, Leffe, Hoegaarden, Balboa ICE, Balboa, Atlas Golden Light, Atlas, Bucanero, Cristal, Mayabe, Presidente, Presidente Light, Brahma Light, Bohemia, The One, Corona, Modelo Especial, Stella Artois, Quilmes Clásica, Paceña, Taquiña, Huari, Becker, Cusqueña, Michelob Ultra, Busch, Pilsen, Ouro Fino, Bud 66, Banks, Deputy, Patricia, Labatt Blue, Alexander Keith’s, and Kokanee brands. The company also provides carbonated soft drinks, bottled water, isotonic beverages, energy drinks, coconut water, powdered and natural juices, and ready-to-drink teas under the Guaraná Antarctica, Gatorade, H2OH!, Pepsi Black, Lipton Iced Tea, Fusion, Pepsi-Cola, Canada Dry, Squirt, Red Rock, Red Bull, Seven Up, Nutrl, Bud Light Seltzer, Palm Bay, and Mike’s brands. It 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 Anheuser-Busch InBev SA/NV

Anheuser-Busch InBev SA/NV produces, distributes, exports, markets, and sells beer and beverages. It offers a portfolio of approximately 500 beer brands, which primarily include Budweiser, Corona, and Stella Artois; Beck's, Hoegaarden, Leffe, and Michelob Ultra; and Aguila, Antarctica, Bud Light, Brahma, Cass, Castle, Castle Lite, Cristal, Harbin, Jupiler, Modelo Especial, Quilmes, Victoria, Sedrin, and Skol brands. The company operates in North America, Middle America, South America, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1366 and is headquartered in Leuven, Belgium.