With shares of Anheuser-Busch (NYSE:BUD) trading at around $89.21 is BUD an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Anheuser-Busch is best known for its Budweiser, Becks, Bud Light and Michelob brands, but it’s about to add Corona to the list. Considering Corona is the fourth most profitable beer in the world, this will expand an already successful empire.
Anheuser-Busch has a solid footing in Latin America, and owning Corona will do wonders in that regard. Currently, Anheuser-Busch only has 15 percent total sales in Europe. Europe is far from a consumer wonderland at the moment, but we are talking about beer here. If there’s a way for Anheuser-Busch to expand in Europe, they will figure it out. This isn’t an attempt at selling future potential for Anheuser-Busch. This prognostication is simply based on past performance. This company has been steadily growing global market share for years.
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Anheuser-Busch has also embarked on a massive cost-cutting campaign. This might dilute the number of quality employees, but it will also improve the bottom line. There is potential for this to have a negative impact on long-term results. Time will tell. At the moment, investors certainly aren’t complaining.
Anheuser-Busch has seen a 20 percent increase in sales YoY for the past four years. This trend is likely to continue. There is a one percent yield whereas competitor Boston Beer (NYSE:SAM) doesn’t offer any yield. On the other hand, Molson Coors Brewing Company (NYSE:TAP) offers a more impressive three percent yield. The good news is that Anheuser-Busch is expected to increase its dividend in the future, but you shouldn’t expect it to come anywhere near three percent.
Let’s take a look at some important numbers. This will help determine if Anheuser-Busch is a good investment going forward.