AMBEV SA-ADR (ABEV) Stock Fundamental Analysis
NYSE:ABEV - New York Stock Exchange, Inc. - US02319V1035 - ADR - Currency: USD
We assign a fundamental rating of 6 out of 10 to ABEV. ABEV was compared to 32 industry peers in the Beverages industry. While ABEV belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ABEV scores decently on growth, while it is valued quite cheap. This could make an interesting combination. With these ratings, ABEV could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
In the past year ABEV was profitable.
ABEV had a positive operating cash flow in the past year.
Each year in the past 5 years ABEV has been profitable.
Each year in the past 5 years ABEV had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ABEV (9.80%) is better than 78.13% of its industry peers.
With a Return On Equity value of 15.27%, ABEV perfoms like the industry average, outperforming 59.38% of the companies in the same industry.
ABEV has a Return On Invested Capital of 18.50%. This is amongst the best in the industry. ABEV outperforms 90.63% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ABEV is significantly above the industry average of 11.51%.
The last Return On Invested Capital (18.50%) for ABEV is above the 3 year average (17.11%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.8% | ||
| ROE | 15.27% | ||
| ROIC | 18.5% |
ROA(3y)10.1%
ROA(5y)9.71%
ROE(3y)16.88%
ROE(5y)16.28%
ROIC(3y)17.11%
ROIC(5y)16.49%
1.3 Margins
Looking at the Profit Margin, with a value of 15.74%, ABEV belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
ABEV's Profit Margin has declined in the last couple of years.
The Operating Margin of ABEV (24.80%) is better than 78.13% of its industry peers.
ABEV's Operating Margin has declined in the last couple of years.
ABEV has a Gross Margin of 51.46%. This is comparable to the rest of the industry: ABEV outperforms 59.38% of its industry peers.
ABEV's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.8% | ||
| PM (TTM) | 15.74% | ||
| GM | 51.46% |
OM growth 3Y0.69%
OM growth 5Y-5.02%
PM growth 3Y-2.46%
PM growth 5Y-6.55%
GM growth 3Y0.12%
GM growth 5Y-2.55%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ABEV is destroying value.
The number of shares outstanding for ABEV remains at a similar level compared to 1 year ago.
The number of shares outstanding for ABEV remains at a similar level compared to 5 years ago.
Compared to 1 year ago, ABEV has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.90 indicates that ABEV is not in any danger for bankruptcy at the moment.
The Altman-Z score of ABEV (3.90) is better than 65.63% of its industry peers.
ABEV has a debt to FCF ratio of 0.15. This is a very positive value and a sign of high solvency as it would only need 0.15 years to pay back of all of its debts.
ABEV has a better Debt to FCF ratio (0.15) than 84.38% of its industry peers.
ABEV has a Debt/Equity ratio of 0.02. This is a healthy value indicating a solid balance between debt and equity.
ABEV has a better Debt to Equity ratio (0.02) than 84.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 0.15 | ||
| Altman-Z | 3.9 |
ROIC/WACC0.96
WACC19.36%
2.3 Liquidity
A Current Ratio of 1.11 indicates that ABEV should not have too much problems paying its short term obligations.
ABEV's Current ratio of 1.11 is on the low side compared to the rest of the industry. ABEV is outperformed by 62.50% of its industry peers.
A Quick Ratio of 0.80 indicates that ABEV may have some problems paying its short term obligations.
ABEV has a Quick ratio (0.80) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.63% over the past year.
The Earnings Per Share has been growing slightly by 3.40% on average over the past years.
ABEV shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.18%.
The Revenue has been growing by 11.46% on average over the past years. This is quite good.
EPS 1Y (TTM)1.63%
EPS 3Y3.53%
EPS 5Y3.4%
EPS Q2Q%13.33%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y7.08%
Revenue growth 5Y11.46%
Sales Q2Q%0.23%
3.2 Future
ABEV is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.57% yearly.
Based on estimates for the next years, ABEV will show a small growth in Revenue. The Revenue will grow by 5.87% on average per year.
EPS Next Y13.11%
EPS Next 2Y9.14%
EPS Next 3Y8.79%
EPS Next 5Y10.57%
Revenue Next Year8.51%
Revenue Next 2Y6.84%
Revenue Next 3Y6.28%
Revenue Next 5Y5.87%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 13.00, the valuation of ABEV can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of ABEV indicates a rather cheap valuation: ABEV is cheaper than 87.50% of the companies listed in the same industry.
ABEV's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.24.
With a Price/Forward Earnings ratio of 11.18, the valuation of ABEV can be described as very reasonable.
Based on the Price/Forward Earnings ratio, ABEV is valued cheaply inside the industry as 90.63% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.42, ABEV is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13 | ||
| Fwd PE | 11.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ABEV is valued cheaper than 100.00% of the companies in the same industry.
96.88% of the companies in the same industry are more expensive than ABEV, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.66 | ||
| EV/EBITDA | 5.76 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ABEV has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.99
PEG (5Y)3.83
EPS Next 2Y9.14%
EPS Next 3Y8.79%
5. Dividend
5.1 Amount
ABEV has a Yearly Dividend Yield of 1.93%.
Compared to an average industry Dividend Yield of 2.83, ABEV pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, ABEV has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
5.2 History
The dividend of ABEV decreases each year by -12.44%.
ABEV has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-12.44%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
ABEV pays out 73.84% of its income as dividend. This is not a sustainable payout ratio.
DP73.84%
EPS Next 2Y9.14%
EPS Next 3Y8.79%
2.21
+0.03 (+1.38%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners7.42%
Inst Owner Change-0.6%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap34.46B
Analysts71.3
Price Target2.6 (17.65%)
Short Float %1.18%
Short Ratio1.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
Yearly Dividend0.05
Dividend Growth(5Y)-12.44%
DP73.84%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.8%
Min EPS beat(2)-4.34%
Max EPS beat(2)7.94%
EPS beat(4)1
Avg EPS beat(4)-3.87%
Min EPS beat(4)-11.29%
Max EPS beat(4)7.94%
EPS beat(8)3
Avg EPS beat(8)-1.13%
EPS beat(12)7
Avg EPS beat(12)7.04%
EPS beat(16)10
Avg EPS beat(16)10.74%
Revenue beat(2)1
Avg Revenue beat(2)-0.88%
Min Revenue beat(2)-3.37%
Max Revenue beat(2)1.61%
Revenue beat(4)2
Avg Revenue beat(4)-1.4%
Min Revenue beat(4)-3.87%
Max Revenue beat(4)1.61%
Revenue beat(8)2
Avg Revenue beat(8)-4.46%
Revenue beat(12)3
Avg Revenue beat(12)-3.62%
Revenue beat(16)6
Avg Revenue beat(16)-2.08%
PT rev (1m)-1.34%
PT rev (3m)4.13%
EPS NQ rev (1m)-6.07%
EPS NQ rev (3m)-8.73%
EPS NY rev (1m)0.16%
EPS NY rev (3m)0.02%
Revenue NQ rev (1m)-1.86%
Revenue NQ rev (3m)-1.4%
Revenue NY rev (1m)-0.57%
Revenue NY rev (3m)-0.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13 | ||
| Fwd PE | 11.18 | ||
| P/S | 2.08 | ||
| P/FCF | 8.66 | ||
| P/OCF | 7.18 | ||
| P/B | 2.02 | ||
| P/tB | 4.74 | ||
| EV/EBITDA | 5.76 |
EPS(TTM)0.17
EY7.69%
EPS(NY)0.2
Fwd EY8.94%
FCF(TTM)0.26
FCFY11.54%
OCF(TTM)0.31
OCFY13.94%
SpS1.06
BVpS1.1
TBVpS0.47
PEG (NY)0.99
PEG (5Y)3.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.8% | ||
| ROE | 15.27% | ||
| ROCE | 21.06% | ||
| ROIC | 18.5% | ||
| ROICexc | 22.78% | ||
| ROICexgc | 59.82% | ||
| OM | 24.8% | ||
| PM (TTM) | 15.74% | ||
| GM | 51.46% | ||
| FCFM | 24.02% |
ROA(3y)10.1%
ROA(5y)9.71%
ROE(3y)16.88%
ROE(5y)16.28%
ROIC(3y)17.11%
ROIC(5y)16.49%
ROICexc(3y)21.47%
ROICexc(5y)20.62%
ROICexgc(3y)60.94%
ROICexgc(5y)58.16%
ROCE(3y)19.48%
ROCE(5y)18.77%
ROICexcg growth 3Y12.62%
ROICexcg growth 5Y3.42%
ROICexc growth 3Y6.91%
ROICexc growth 5Y0.69%
OM growth 3Y0.69%
OM growth 5Y-5.02%
PM growth 3Y-2.46%
PM growth 5Y-6.55%
GM growth 3Y0.12%
GM growth 5Y-2.55%
F-Score8
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 0.15 | ||
| Debt/EBITDA | 0.07 | ||
| Cap/Depr | 63.29% | ||
| Cap/Sales | 4.98% | ||
| Interest Coverage | 27.2 | ||
| Cash Conversion | 88.8% | ||
| Profit Quality | 152.61% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 3.9 |
F-Score8
WACC19.36%
ROIC/WACC0.96
Cap/Depr(3y)89.96%
Cap/Depr(5y)100.59%
Cap/Sales(3y)7.01%
Cap/Sales(5y)7.92%
Profit Quality(3y)124.82%
Profit Quality(5y)123.82%
High Growth Momentum
Growth
EPS 1Y (TTM)1.63%
EPS 3Y3.53%
EPS 5Y3.4%
EPS Q2Q%13.33%
EPS Next Y13.11%
EPS Next 2Y9.14%
EPS Next 3Y8.79%
EPS Next 5Y10.57%
Revenue 1Y (TTM)12.18%
Revenue growth 3Y7.08%
Revenue growth 5Y11.46%
Sales Q2Q%0.23%
Revenue Next Year8.51%
Revenue Next 2Y6.84%
Revenue Next 3Y6.28%
Revenue Next 5Y5.87%
EBIT growth 1Y19.5%
EBIT growth 3Y7.82%
EBIT growth 5Y5.86%
EBIT Next Year42.35%
EBIT Next 3Y16.28%
EBIT Next 5Y11.41%
FCF growth 1Y72.75%
FCF growth 3Y11.93%
FCF growth 5Y9.91%
OCF growth 1Y36.01%
OCF growth 3Y4.45%
OCF growth 5Y7.26%