02-15-2019, 10:56 AM
(02-15-2019, 10:37 AM)NilesMike Wrote: Don't like BUD at all, their business trajectory is down. STZ is a much better buy IMO. Since BUD sold Corona/Modello to STZ it has gone from $105ish to 70ish , while STZ has gone from $80ish to 180ish
(02-15-2019, 10:11 AM)Otter Wrote: Added to BUD and T this morning.
Both appear roughly fairly valued to me. BUD is trading right at its historical average P/E, with a yield (even after the divvy cut and foreign tax) about 50 basis points higher than STZ (although STZ's recent history of raises is impressive). I also view BUD as a bet on Dollar vs. emerging market currencies reverting back to the historical mean at some point in the near future. Although it pains me to invest in them as a homebrewer, BUD is one of the 800lb gorillas in the beer space, and I think they will continue to execute well in that challenging space long-term.
STZ is trading a bit under its 10-year average P/E of 21, but in the same ballpark as BUD. I think the current discount for STZ is the market trying to digest the impact of them making a huge bet on cannabis by spending $4B (a sizable percentage of their market cap) for Canopy. I don't know that you will see the same meteoric divvy growth going forward for STZ, at least for the next couple years.
Frankly, I like both. I have had STZ on my watch-list for a while. Would also love to own BF.B if it ever drops to a P/E in the low 20s (one can hope). Selling booze is profitable.