Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Brazilian beer and soft drink maker Companhia de Bebidas das Americas (NYSE: ABV ) , also known as AmBev, has earned a coveted five-star ranking.
With that in mind, let's take a closer look at AmBev's business and see what CAPS investors are saying about the stock right now.
AmBev facts
| Headquarters (Founded) |
Sao Paulo, Brazil (1988) |
| Market Cap |
$90 billion |
| Industry |
Brewers |
| Trailing-12-Month Revenue |
$14.5 billion |
| Management |
CEO Joao Castro Neves
CFO Nelson Jamel |
| Return on Capital (Average, Past 3 Years) |
18.7% |
| Cash/Debt |
$4.65 billion / $4.06 billion |
| Dividend Yield |
3.5% |
| Competitors |
Coca-Cola (NYSE: KO )
FEMSA (NYSE: FMX )
Molson Coors (NYSE: TAP ) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 389 members who have rated AmBev believe the stock will outperform the S&P 500 going forward. These bulls include EQInvestments and shanelofgren.
Just last month, EQInvestments noted that AmBev "gives an investor direct exposure to Latin American development, most notably in Brazil." Our CAPS member concludes: "Furthermore, with the World Cup coming to Brazil in 2014 and the Olympics coming in 2016, the demand for beer, soft drinks, and other beverages is sure to sky-rocket."
AmBev's massive scale, wide distribution, and exposure to the highly attractive Latin American market (where per capita consumption remains relatively low) support its five-star CAPS rating. Thanks to its ultra-efficient operations, the Anheuser-Busch (NYSE: BUD ) unit even sports a higher three-year average return on capital (18.7%) than that of rivals Coca-Cola (15.6%), FEMSA (10.1%), and Molson (3.5%), as well as other beverage stocks like Diageo (NYSE: DEO ) (13.5%) and Fortune Brands (NYSE: FO ) (5.6%).
CAPS member shanelofgreen expands on the tasty trends working in Ambev's favor:
Brazilian consumers will continue to grow more wealthy and have more money to spend on beverages. The company mentions the relatively small but growing market share of premium beers which likely command higher smargins as a source of growth for the company. ... Furthermore, the company makes the good point that economic growth in Brazil is more likely to transfer into increased consumer goods sales than elsewhere because of Brazil's minimum wage and other wealth redistribution programs.
What do you think about AmBev, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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