Anheuser-Busch Companies Inc. (NYSE:BUD) traded at $46 in mid-December 2002. It currently changes hands at about $48. During that period, operating income has been fairly flat at in the $3.3 to $2.7 billion range.
Recently, BUD did a deal with InBev to import certain popular brands like Becks, which should add to its revenue. Deals like this may grow because BUD has by far the largest share of the U.S. market and a huge distribution network that would allow other companies to piggy back off of its infrastructure. BUD is also diversifying overseas to ramp up its revenue. Recently, it has purchased assets in Mexico and China.
While Diageo, a European competitor with revenue of just over $12 billion has a market cap of $59 billion, BUD has a cap of $36 billion on revenue of over $15 billion.
UBS recently upped its rating on BUD due to the InBev deal and the company says it will raise prices next year. The company has also reiterated its long-term growth goals, which means that 2007 could be a strong year for the brewer.
Douglas McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
12-04-2006 @ 3:51PM
Tom Barniak Jr. said...
Bring back Spuds McKenzie- little dog with the beautiful babes all swirling around- that was great-the hell with the animal rights people who got it stopped way back when- Spuds had a better life than most humans.
12-04-2006 @ 10:21PM
Roger said...
Comparing Diageo to BUD is ridiculous, since most of Diageo's brands are higher margin spirits, and not beer. Of course the market cap is higher for the company that owns Cuervo, Tanqueray, Johnny Walker,
and many other top brands.Look at all the martini bars these days. No one drinking a Bud, but opportunities for Diageo all over the top shelf.
12-04-2006 @ 10:59PM
Brett said...
Anheuser-Busch also signed an agreement with Hansen Natural (HANS) this past year for distribution of their products. Hansen's Monster Energy drink has emerged as the fastest growing energy drink on the market and is quickly gaining ground on Red Bull. In addition, Hansen has a wide array of products from soft drinks to fruit juices to teas. I am not sure of the particulars of the deal between Hansen and Anheuser-Busch, but I would assume that both companies will benefit in the coming years. Perhaps, Anheuser-Busch will also take Hansen to markets around the world.