Anheuser-Busch InBev SA/NV (NYSE:BUD) versus Ambev (NYSE:ABEV) Critical Comparison

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Anheuser-Busch InBev SA/NV	15.42%	17.28%	7.86%
Ambev	17.80%	18.13%	11.50%

Risk & Volatility

Anheuser-Busch InBev SA/NV has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Ambev has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Anheuser-Busch InBev SA/NV	$59.32 billion	2.85	$6.84 billion	$5.00	16.77
Ambev	$89.02 billion	0.49	$2.78 billion	$0.19	14.66

Anheuser-Busch InBev SA/NV has higher earnings, but lower revenue 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.

Insider and Institutional Ownership

5.5% of Anheuser-Busch InBev SA/NV shares are held by institutional investors. Comparatively, 8.1% of Ambev shares are held by institutional investors. 4.5% of Anheuser-Busch InBev SA/NV shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Anheuser-Busch InBev SA/NV and Ambev, as reported by MarketBeat.

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

Anheuser-Busch InBev SA/NV currently has a consensus target price of $87.83, suggesting a potential upside of 4.72%. Ambev has a consensus target price of $3.01, suggesting a potential upside of 7.99%. Given Ambev’s higher possible upside, analysts clearly believe Ambev is more favorable than Anheuser-Busch InBev SA/NV.

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.

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.