Carlsberg AS (OTCMKTS:CABGY) versus Ambev (NYSE:ABEV) Critical Analysis

Ambev (NYSE:ABEV) and Carlsberg AS (OTCMKTS:CABGY) are both large-cap consumer staples companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Ambev and Carlsberg AS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambev	1	7	0	0	1.88
Carlsberg AS	0	2	2	2	3.00

Ambev currently has a consensus target price of $2.53, indicating a potential downside of 9.11%. Given Ambev’s higher possible upside, equities analysts clearly believe Ambev is more favorable than Carlsberg AS.

Institutional and Insider Ownership

8.1% of Ambev shares are owned by institutional investors. 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 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Carlsberg AS has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ambev	17.90%	15.81%	10.16%
Carlsberg AS	N/A	N/A	N/A

Dividends

Ambev pays an annual dividend of $0.33 per share and has a dividend yield of 11.9%. Carlsberg AS pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. Ambev pays out 183.3% 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 and Earnings

This table compares Ambev and Carlsberg AS”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambev	$16.59 billion	2.64	$2.68 billion	$0.18	15.44
Carlsberg AS	$10.88 billion	1.68	$1.32 billion	N/A	N/A

Ambev has higher revenue and earnings than Carlsberg AS.

Summary

Ambev beats Carlsberg AS on 10 of the 14 factors compared between the two stocks.

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 Carlsberg AS

Carlsberg A/S produces and sells beer and other beverage products in Denmark, China, the United Kingdom, and internationally. The company offers core, craft, and specialty beers; soft drinks; and alcohol-free brews under various brands. The company was founded in 1847 and is headquartered in Copenhagen, Denmark.