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Is Anheuser-Busch InBev For You?

Herding Value profile picture
Herding Value


  • BUD is the beer industry's Clydesdale with worldwide operations and powerful, valuable brands that dominate major markets with near-monopolies.
  • BUD faces a significant challenge in that, as measured by volume of beer consumed globally, the beer industry is in a slow protracted decline.
  • 2017's performance was indicative of successful integration of the huge SABMiller acquisition with excellent progress in revenues, up 4.6%, gross profit, up 7.0% and EBITDA, up 12.5%.
  • With an acceptable 3.7% dividend yield and clarity regarding possible growth catalysts for the future BUD merits consideration as an addition to your portfolio.

Seasoned investors remember the old Anheuser Busch Company as a staple of 70's and 80's growth and income portfolios, a reliable company right there with IBM (NYSE: IBM), General Mills (NYSE: GIS), Procter & Gamble (NYSE: PG) and the other golden oldies. Times change and so did Anheuser Busch, morphing into today's Anheuser Busch InBev SA/NV (BUD) - what a mouthful - a sponsored ADR! The Clydesdales aren't even American anymore!

SOURCE: anheuser-busch.com

How the mighty have…changed.

What is BUD These Days?

Today's BUD is the product of two major beer brewery mergers. On November, 18, 2008, Belgian-Brazilian brewer InBev completed a $52.0 billion hostile acquisition of the Anheuser Busch Company creating the largest beer company in the world. On October 10, 2016, the new Anheuser-Busch InBev acquired SABMiller, the world's second largest brewer, for $107.0 billion.

The new BUD is the industry's Clydesdale. With beer production of over 600 million hectoliters (1 hectoliter = 100 liters), BUD accounts for roughly 26% of the worldwide beer market. The company's reach is worldwide, selling more than 500 beer brands in over 150 countries. According to The Drinks Business per data provided by Euromonitor International, BUD owned 5 of the top 10 selling brands in the world in 2016 including Corona, Brahma, Harbin, Budweiser and Bud Light. As noted on the following chart, Kantar Millward Brown's brand equity ranking BrandZ, ranks 7 of BUD's beer brands among the top 10 most valuable in the world.

SOURCE: 2017 AB InBev Annual Report

There has never been a beer company with the global sales, operations and multitude of brands of the current BUD.

The company is headquartered in Leuven, Belgium and employs more than 200,000 in administrative and brewing operations in more than 50 countries. With annual revenue of $56.4 billion and a market cap of $172.4 billion

This article was written by

Herding Value profile picture
Former corporate executive.

Analyst’s Disclosure: I am/we are long BUD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (80)

somedata1 profile picture
Successfully avoided SOB stock BUD and sold SOB stock MO at 64.5/share.
mjtroll1 profile picture
pacw/spy pair new all time low..bud/spy pair is near all time low
mjtroll1 profile picture
pacw/spy pair new all time low
mjtroll1 profile picture
regarding BUD
I bot the bud/spy pair as it seems to have bottomed.. assuming no change in market am wrong with close below 73.20
somedata1 profile picture
It may go to 0.
mjtroll1 profile picture
bud/spy pair gets crushed to new all time low.. I miss the diatribe response from herding value..hope everything is ok
somedata1 profile picture
bud is a piece of s*** stock. Reason being sky high debt load.

DEBT is a dirty 4 letter word....
mjtroll1 profile picture
new all time low on bud/spy pair
mjtroll1 profile picture
regarding this statement

You may stop now, there is no added value to your comme

thks for weighing in
mjtroll1 profile picture
bud//heiny new all time lows
pacw/spy new multimonth low
LexOFF profile picture
You may stop now, there is no added value to your comments.
mjtroll1 profile picture
gis/spy pair new all time low
mjtroll1 profile picture
bud/tap/heiny trifecta...new all time lows vs spy on all three
somedata1 profile picture
The problem with GIS is another example of over extending its balance sheet.

Interesting observation mjtroll1.

Lucky not be in GIS, GE, BUD

Now. How about AOS? It's a good company. I like to see it cut in half. Then I will buy.
mjtroll1 profile picture
gis/spy pair new all time low today
somedata1 profile picture
Part of my brain said NO to BA...

It's a cyclical play... Don't know the industry well...
mjtroll1 profile picture
regarding ba

the ba/spy pair has gone parabolic (ba outperform) since September 2016..for years prior to that it was a modest market underperformer.. the pair has been very choppy for the last several months but still has has not broken down IMHO.. if long would have trailing stop below 308 assuming no change in market
somedata1 profile picture
That's a good technical assessment.

Background: spinoff situation, medium market cap high potential, The North Face: killer brand only to grow...

It will reach the escape velocity... Hence no sign of reversal.

I have a small position for long term holding...
mjtroll1 profile picture
regarding vfc

the vfc/spy pair has gone from over sigma cheap and near low reached in 2011 and is now trading near 1 sigma rich on 10yr horizon.. no sign for reversal but would have trailing stop if long
somedata1 profile picture


I really like BA and VFC.
mjtroll1 profile picture
somedata1..am not recommending buying any of the three
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