Critical Survey: Ambev (ABEV) & Kirin (KNBWY)

Ambev (NYSE: ABEV) and Kirin (OTCMKTS:KNBWY) 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 valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

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Ambev has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Kirin has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.

Institutional and Insider Ownership

7.2% of Ambev shares are owned by institutional investors. Comparatively, 0.2% of Kirin shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Ambev and Kirin, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambev 0 1 2 0 2.67
Kirin 0 0 0 0 N/A

Ambev currently has a consensus price target of $8.00, indicating a potential upside of 11.89%. Given Ambev’s higher probable upside, research analysts clearly believe Ambev is more favorable than Kirin.

Profitability

This table compares Ambev and Kirin’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ambev 15.68% 24.16% 14.10%
Kirin 8.10% 15.21% 6.97%

Dividends

Ambev pays an annual dividend of $0.15 per share and has a dividend yield of 2.1%. Kirin does not pay a dividend. Ambev pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Ambev and Kirin’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ambev $15.01 billion 7.48 $2.30 billion $0.15 47.67
Kirin $16.62 billion 1.48 $2.16 billion $1.59 16.92

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

Summary

Ambev beats Kirin on 11 of the 14 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 Kirin

Kirin Holdings Company, Limited is a holding company. The Company is engaged in alcohol beverages, non-alcohol beverages, and pharmaceuticals and bio-chemicals businesses. The Company’s segments include Integrated Beverages, Pharmaceuticals and Bio-chemicals, and Others. Its Others segment includes food business, such as dairy products, and others. Its businesses comprise Japan Integrated Beverages, Overseas Integrated Beverages, and Pharmaceuticals and Bio-chemicals. The Japan Integrated Beverages business conducts manufacturing and sales of alcoholic beverages and non-alcoholic beverages in Japan. The Overseas Integrated Beverages business includes Lion Nathan Limited (Lion), Schincariol Participacoes e Representacoes S.A. (Brasil Kirin) and Myanmar Brewery Limited. The Pharmaceuticals and Bio-chemicals business includes Kyowa Hakko Kirin Co., Ltd., ProStrakan Group plc and Kyowa Hakko Bio Co., Ltd.

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