Stock of the Day

November 11, 2021

Ambev (ABEV)

$1.93
+$0.02 (+0.8%)
Market Cap: $30.09B

About Ambev

Ambev S.A., through its subsidiaries, engages in the production, distribution, and sale of beer, draft beer, carbonated soft drinks, malt and food, other alcoholic beverages, and non-alcoholic and non-carbonated products in Brazil, Central America and Caribbean, Latin America South, and Canada. It offers beer primarily under the Skol, Brahma, Antarctica, Brahva, Budweiser, Bud Light, Beck, Leffe, Hoegaarden, Balboa ICE, Balboa, Atlas Golden Light, Atlas, Bucanero, Cristal, Mayabe, Presidente, Presidente Light, Brahma Light, Bohemia, The One, Corona, Modelo Especial, Stella Artois, Quilmes Clásica, Paceña, Taquiña, Huari, Becker, Cusqueña, Michelob Ultra, Busch, Pilsen, Ouro Fino, Bud 66, Banks, Deputy, Patricia, Labatt Blue, Alexander Keith's, and Kokanee brands. The company also provides carbonated soft drinks, bottled water, isotonic beverages, energy drinks, coconut water, powdered and natural juices, and ready-to-drink teas under the Guaraná Antarctica, Gatorade, H2OH!, Pepsi Black, Lipton Iced Tea, Fusion, Pepsi-Cola, Canada Dry, Squirt, Red Rock, Red Bull, Seven Up, Nutrl, Bud Light Seltzer, Palm Bay, and Mike's brands. It offers its products through a network of third-party distributors and a direct distribution system. The company was founded in 1885 and is headquartered in São Paulo, Brazil. Ambev S.A. is a subsidiary of Interbrew International B.V.

Ambev Bull Case

Here are some ways that investors could benefit from investing in Ambev S.A.:

  • Ambev S.A. has a current dividend yield of 1.93%, which can provide a steady income stream for investors looking for dividend-paying stocks.
  • The company has a relatively low payout ratio of 38.89%, indicating that it retains a significant portion of its earnings for reinvestment, which could support future growth.
  • With a market capitalization of $28.91 billion, Ambev S.A. is a large player in the beverage industry, which can provide stability and resilience against market fluctuations.
  • Recent trading activity shows that 47,938,742 shares were exchanged, indicating strong investor interest and liquidity in the stock.
  • The current stock price is around $1.94, which is near its 50-day moving average, suggesting potential for price stability and growth in the near term.

Ambev Bear Case

Investors should be bearish about investing in Ambev S.A. for these reasons:

  • The company has a quick ratio of 0.89, which is below 1, indicating potential liquidity issues in meeting short-term obligations without selling inventory.
  • Ambev S.A. has a debt-to-equity ratio of 0.02, which is very low, suggesting that the company is not leveraging debt for growth, potentially limiting its expansion opportunities.
  • The price-to-earnings (P/E) ratio of 10.19 may indicate that the stock is undervalued, but it could also suggest that investors are cautious about future earnings growth.
  • Ambev S.A. has experienced fluctuations in its stock price, with a 1-year low of $1.76 and a high of $2.72, indicating volatility that could deter risk-averse investors.
  • Only 8.13% of the stock is owned by hedge funds and institutional investors, which may suggest a lack of confidence from larger investors in the company's future performance.

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