Ambev (NYSE: ABEV) and Compania Cervecerias Unidas, (NYSE:CCU) are both mid-cap consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitabiliy, dividends and valuation.

Volatility and Risk

Ambev has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, Compania Cervecerias Unidas, has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Institutional and Insider Ownership

7.8% of Ambev shares are held by institutional investors. Comparatively, 12.9% of Compania Cervecerias Unidas, shares are held by institutional investors. 8.4% of Compania Cervecerias Unidas, shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Compania Cervecerias Unidas, pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Ambev does not pay a dividend. Compania Cervecerias Unidas, pays out 32.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Ambev and Compania Cervecerias Unidas,’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ambev $13.70 billion 6.25 $5.49 billion $0.24 22.71
Compania Cervecerias Unidas, $2.39 billion 2.01 $425.42 million $0.98 26.57

Ambev has higher revenue and earnings than Compania Cervecerias Unidas,. Ambev is trading at a lower price-to-earnings ratio than Compania Cervecerias Unidas,, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Ambev and Compania Cervecerias Unidas,, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ambev 0 3 2 0 2.40
Compania Cervecerias Unidas, 0 2 0 0 2.00

Ambev presently has a consensus target price of $6.20, indicating a potential upside of 13.76%. Compania Cervecerias Unidas, has a consensus target price of $24.75, indicating a potential downside of 4.95%. Given Ambev’s stronger consensus rating and higher possible upside, analysts clearly believe Ambev is more favorable than Compania Cervecerias Unidas,.

Profitability

This table compares Ambev and Compania Cervecerias Unidas,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ambev 27.04% 23.90% 14.23%
Compania Cervecerias Unidas, 7.58% 10.48% 6.88%

Summary

Ambev beats Compania Cervecerias Unidas, on 11 of the 16 factors compared between the two stocks.

Ambev Company Profile

Ambev SA, formerly Inbev Participacoes Societarias SA, is a Brazil-based company engaged in the brewing sector. The Company produces and sells beer, carbonated soft drinks (CSDs) and other non-alcoholic and non-carbonated (NANC) beverages across the Americas. The Company’s activities are divided into three segments: Latin America North, including sell of beer, CSD and NANC drinks in Brazil, as well as operations in Dominican Republic, Saint Vincent, Antigua, Dominica, Guatemala, El Salvador, Nicaragua and Cuba; Latin America South, distributing products in Argentina, Bolivia, Paraguay, Uruguay, Chile, Ecuador, Peru and Colombia, and Canada, represented by Labatt’s operations, which comprises sales in Canada. The Company markets products under various brand names, such as Adriatica, Brahma, Leffe, Budweiser, Corona, PepsiCo and Lipton. It is a subsidiary of Interbrew International BV.

Compania Cervecerias Unidas, Company Profile

Compania Cervecerias Unidas S.A. is a diversified beverage company operating principally in Chile, Argentina, Bolivia, Colombia, Paraguay and Uruguay. The Company operates as a brewer, soft drinks producer, water and nectar producer, wine producer and pisco distributor. The Company’s segments include Chile, International Business and Wine. The Company carries a portfolio of products, which includes a range of brands of alcoholic and non-alcoholic beer, with Cristal as its primary brand in Chile. In addition, it produces and distributes Heineken beer; distributes Sol beer and Budweiser beer, and distributes and produces Kunstmann and Austral beer in Chile. The International Business segment includes operations in Argentina, Paraguay and Uruguay. The Company, through Vina San Pedro Tarapaca S.A. (VSPT), produces and markets a range of wine products for the domestic and mainly the export market.

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