AMBEV SA-ADR (ABEV) Stock Fundamental Analysis
NYSE:ABEV - New York Stock Exchange, Inc. - US02319V1035 - ADR - Currency: USD
Overall ABEV gets a fundamental rating of 6 out of 10. We evaluated ABEV against 32 industry peers in the Beverages industry. ABEV scores excellent on profitability, but there are some minor concerns on its financial health. ABEV may be a bit undervalued, certainly considering the very reasonable score on growth This makes ABEV very considerable 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.
ABEV had positive earnings in each of the past 5 years.
In the past 5 years ABEV always reported a positive cash flow from operatings.
1.2 Ratios
ABEV's Return On Assets of 9.80% is fine compared to the rest of the industry. ABEV outperforms 78.13% of its industry peers.
The Return On Equity of ABEV (15.27%) is comparable to the rest of the 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.
Measured over the past 3 years, the Average Return On Invested Capital for ABEV is significantly above the industry average of 11.61%.
The 3 year average ROIC (17.11%) for ABEV is below the current ROIC(18.50%), indicating increased profibility in the last year.
| 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.
ABEV has a Operating Margin of 24.80%. This is in the better half of the industry: ABEV outperforms 78.13% of its industry peers.
In the last couple of years the Operating Margin of ABEV has declined.
Looking at the Gross Margin, with a value of 51.46%, ABEV is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
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.
ABEV has about the same amout of shares outstanding than it did 1 year ago.
ABEV has about the same amout of shares outstanding than it did 5 years ago.
Compared to 1 year ago, ABEV has an improved debt to assets ratio.
2.2 Solvency
ABEV has an Altman-Z score of 4.06. This indicates that ABEV is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.06, ABEV is doing good in the industry, outperforming 68.75% of the companies in the same industry.
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.
A Debt/Equity ratio of 0.02 indicates that ABEV is not too dependend on debt financing.
ABEV's Debt to Equity ratio of 0.02 is amongst the best of the industry. ABEV outperforms 84.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.02 | ||
| Debt/FCF | 0.15 | ||
| Altman-Z | 4.06 |
ROIC/WACC0.89
WACC20.71%
2.3 Liquidity
ABEV has a Current Ratio of 1.11. This is a normal value and indicates that ABEV is financially healthy and should not expect problems in meeting its short term obligations.
ABEV's Current ratio of 1.11 is in line compared to the rest of the industry. ABEV outperforms 40.63% of its industry peers.
ABEV has a Quick Ratio of 1.11. This is a bad value and indicates that ABEV is not financially healthy enough and could expect problems in meeting its short term obligations.
ABEV's Quick ratio of 0.80 is in line compared to the rest of the industry. ABEV outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The earnings per share for ABEV have decreased by -1.61% in the last year.
Measured over the past 5 years, ABEV shows a small growth in Earnings Per Share. The EPS has been growing by 3.40% on average per year.
ABEV shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.34%.
The Revenue has been growing by 11.46% on average over the past years. This is quite good.
EPS 1Y (TTM)-1.61%
EPS 3Y3.53%
EPS 5Y3.4%
EPS Q2Q%2.17%
Revenue 1Y (TTM)15.34%
Revenue growth 3Y7.08%
Revenue growth 5Y11.46%
Sales Q2Q%10.95%
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 Year9.13%
Revenue Next 2Y7.14%
Revenue Next 3Y6.42%
Revenue Next 5Y5.87%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.65, which indicates a correct valuation of ABEV.
87.50% of the companies in the same industry are more expensive than ABEV, based on the Price/Earnings ratio.
ABEV's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.28.
ABEV is valuated correctly with a Price/Forward Earnings ratio of 12.39.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ABEV indicates a rather cheap valuation: ABEV is cheaper than 90.63% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ABEV to the average of the S&P500 Index (21.76), we can say ABEV is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 12.39 |
4.2 Price Multiples
93.75% of the companies in the same industry are more expensive than ABEV, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ABEV indicates a rather cheap valuation: ABEV is cheaper than 93.75% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.59 | ||
| EV/EBITDA | 6.25 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of ABEV may justify a higher PE ratio.
PEG (NY)1.12
PEG (5Y)4.31
EPS Next 2Y9.14%
EPS Next 3Y8.79%
5. Dividend
5.1 Amount
ABEV has a Yearly Dividend Yield of 6.43%, which is a nice return.
ABEV's Dividend Yield is rather good when compared to the industry average which is at 3.14. ABEV pays more dividend than 96.88% of the companies in the same industry.
ABEV's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.43% |
5.2 History
The dividend of ABEV decreases each year by -12.44%.
ABEV has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-12.44%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
73.84% of the earnings are spent on dividend by ABEV. This is not a sustainable payout ratio.
DP73.84%
EPS Next 2Y9.14%
EPS Next 3Y8.79%
2.49
+0.07 (+2.89%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners7.42%
Inst Owner Change-23.97%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap38.92B
Analysts71.3
Price Target2.64 (6.02%)
Short Float %1.11%
Short Ratio1.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.43% |
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)3.93%
PT rev (3m)8.57%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.44%
EPS NY rev (1m)0%
EPS NY rev (3m)2.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.32%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 12.39 | ||
| P/S | 2.3 | ||
| P/FCF | 9.59 | ||
| P/OCF | 7.95 | ||
| P/B | 2.24 | ||
| P/tB | 5.25 | ||
| EV/EBITDA | 6.25 |
EPS(TTM)0.17
EY6.83%
EPS(NY)0.2
Fwd EY8.07%
FCF(TTM)0.26
FCFY10.42%
OCF(TTM)0.31
OCFY12.58%
SpS1.08
BVpS1.11
TBVpS0.47
PEG (NY)1.12
PEG (5Y)4.31
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 | 4.06 |
F-Score8
WACC20.71%
ROIC/WACC0.89
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)-1.61%
EPS 3Y3.53%
EPS 5Y3.4%
EPS Q2Q%2.17%
EPS Next Y13.11%
EPS Next 2Y9.14%
EPS Next 3Y8.79%
EPS Next 5Y10.57%
Revenue 1Y (TTM)15.34%
Revenue growth 3Y7.08%
Revenue growth 5Y11.46%
Sales Q2Q%10.95%
Revenue Next Year9.13%
Revenue Next 2Y7.14%
Revenue Next 3Y6.42%
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%