Should I Buy Anheuser-Busch InBev (BUD)? Finance YouTuber Analysis

The YouTuber recommends buying Anheuser-Busch InBev, noting its strong market leadership with 21 brands each generating over a billion dollars in revenue. Despite a recent 38% run-up, the stock's P/E ratio of 18.6 is still below its historical average, and the company is projected to achieve 7% revenue growth and 17% earnings growth this year, making it a stable 'Halo stock' in a volatile market.

“I like shares of Anheiser Bush MBEV, ticker Bud, which even though is already up 38% in the last year, is coming off a multi-year period of weakness, so could have still some upside left.”

The analyst views Anheuser-Busch InBev as a 'safety stock' due to its position as the world's largest brewer with strong brand recognition. Recent Q3 earnings showed robust sales and volume growth, particularly in premium brands. The company is expected to perform well even in a recessionary environment, offering both protection and a dividend.

“People are gonna drink beer in a recession hell they probably drink more beer in a recession and shares of Bud they're not only going to protect your money but are going to pay you a dividend while you wait.”

The YouTuber suggests Anheuser-Busch InBev as a solid value stock with stable cash flows, offering safety during market weakness. Recent strong Q3 earnings, with 11% sales growth, indicate a potential turnaround. Despite a leveraged balance sheet, its valuation at 18.6 times earnings and 2.4 times sales represents a 25% discount to its five-year average price-to-sales multiple.

“shares trade for 18.6 times earnings and 2.4 times sales which is a 25 discount to that five-year average price to sales multiple”

The YouTuber argues that Anheuser-Busch, despite being a large brand, has underperformed the market over the last decade. This is attributed to the internet changing consumer demand and distribution, leading to increased competition from smaller brands and reduced pricing power for established players. He believes this trend will continue, making it a poor long-term investment.

“these phenomenal Brands the companies that own these brands have underperformed the stock market overall over the past decade why is that”