This BUD's for You

03/15/2017 7:00 am EST


Jim Powell

Principal Analyst, Global Changes & Opportunities

I don’t have a problem hitching a ride with an alcohol stock that’s moving up — but, I understand that some investors may feel differently about investing in this sector, advises Jim Powell, editor of Global Changes & Opportunities Report.

People who enjoy alcoholic drinks will satisfy their habits no matter what the economy is doing, making this sector an all-weather buy.

One reason that alcoholic beverages are popular — and are becoming even more so — is they are available in so many varieties.

No matter what a person’s — or a culture’s — taste preferences may be, there are several alcoholic beverages that will be appealing. I believe the most promising international supplier of alcoholic beverages is Anheuser-Busch InBev SA/NV (BUD).

This enduring iconic beer company can trace its roots back 600 years to the Den Hoorn brewery in Leuven, Belgium. It is now a conglomerate of firms that includes SABMiller in London, AmBev in Brazil, and several smaller makers.

Top brands include Budweiser, Michelob, Corona, Stella Artois (being heavily advertised at present), Fosters, and several others that total an amazing 400.

After being blindsided by the craft beer trend several years ago, BUD is now in that fast-growing market. Current brands include Goose Island, Blue Point, Elysian, and Golden Road. More profitable craft entries are expected.

I think BUD is particularly attractive now. Revenues slipped recently due to problems that are common when a company is expanding.

BUD’s Brazil operations also suffered because they predated the start of that country’s economic turnaround.  Not surprisingly, when the numbers fell investors trashed the stock.

In my opinion, the price discount makes BUD a good choice for long-term accounts. A 3.12% dividend yield sweetens the deal.

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