Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

0

Anheuser-Busch (NYSE: BUD)

Trading at $41.99 as of June 13, 2001

Dad deserves the best, and since that battery-operated tie hasn't ever seen the outside of his closet, maybe it's time to go in another direction. Treat him like a king this year with shares of the King of Beers, Anheuser- Busch(NYSE: BUD).

Anheuser Busch is best known for its namesake beer brands Bud and Bud Light, but the world's largest brewer is more than just another beverage company. It commands 49% of the U.S. beer market, dwarfing Miller's (part of the Philip Morris Companies(NYSE: MO)) 20% and Coors'(NYSE: RKY) 11% market shares.

The beverage business is as much about mindshare as it is about taste, so Dad can rest easy knowing that the St. Louis-based Bud will spend more than $2 billion in "marketing, distribution, and administrative expenses" this year protecting its brand. To put that in perspective, Coors had net sales of $2.4 billion last year. Whoever told you size doesn't matter didn't work for a consumer brand company.

But where does a company that's captured nearly 50% of the domestic beer market go from here? Well, the "Whassup?" guys and Louie the Lizard do have some clout outside of the U.S., but last year Bud derived less than 5% of its revenues from international beer sales, so there's plenty of room for expansion abroad. Bud also extends its beer market domination south of the border with its 50.2% interest in Mexico's Grupo Modelo, which controls 55% of the Mexican beer market. The smell of Bud beer doesn't stop at the Panama Canal either, thanks to interests in Chile's largest brewer and an 11% stake in a major Argentine brewer.

As Foolish investors we believe that owning shares of a company makes us part owners, not just market spectators, so Dad can brag about being a part owner of Bud's man-sized divisions. If the old guy is into metallurgy, he can brag to his friends about Bud's Metal Container Corporation (MCC) that makes packaging material, like cans and lids, or its Eagle Packaging division that makes liner materials. If that weren't enough, there's Busch Entertainment, which hosted 21 million visitors last year at parks like Discovery Cove, Sea World, and Busch Gardens.

These divisions didn't add a significant amount to the bottom line last year, but they do complement the core beverage business. Last year, the Packaging Group supplied 61% of the company's cans and 80% of its lids, reducing Bud's exposure to production delays and pricing pressures from third parties. Also, part of this group is the world's largest aluminum can recycler, so Pops can feel proud that he's helping clean up the mess he makes.

Is he a sports fan? Bud is the official sponsor of the Ladies Professional Golf Association (LPGA), Major League Baseball (MLB), Major League Soccer (MLS), NASCAR, the National Basketball Association (NBA), the National Hockey League (NHL), the Professional Golf Association (PGA), and the Women's National Basketball Association (WNBA). Therefore, unless your father thinks bowling is the only sport for men, he'll certainly have an opportunity to support his investment by purchasing a cold one at his favorite sporting event. If he's more of the couch potato type, I hear Bud products can also be consumed at home in convenient 12-ounce portable aluminum or glass containers.

Anheuser-Busch's 1.5% annual dividend may also relieve some of the financial burden you caused as a youngster when you treated him more like an ATM than a DAD. A hundred shares would return $66 to Dad's wallet each year, but if you get in now, it gets better. Summertime is when Bud increases its dividend. Like clockwork, Bud has bumped its dividend each summer for the past several years and the current quarterly dividend of 16.5 cents per share will most likely be increased to 17.5 or 18 cents per quarter. Now that's truly a gift that keeps on giving.

Todd Lebor (TMF Tee Time) does not own shares in any of the companies mentioned above but contributed his fair share to Anheuser-Busch's growth in college. View Todd's other holdings in his profile. 

A Stock for Dad represents the opinion of one Fool and should in no way be taken as the opinion of either The Motley Fool, Inc. or the company in question, or as representative of anyone or anything other than that specific Fool's thoughts. Which can be way out there, so do your homework, and review The Motley Fool'sdisclosure policy.

Next: PepsiCo »


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1146211, ~/Articles/ArticleHandler.aspx, 4/26/2017 3:45:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
Change up DOW 21027.1 31.0 0.2%
Change up S&P 500 2392.1 3.4 0.1%
Change up NASD 6036.0 10.5 0.2%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes