AMBEV S A/S (NYSE: KDP) and Keurig Dr Pepper (NYSE:KDP) are both large-cap consumer staples companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Profitability

This table compares AMBEV S A/S and Keurig Dr Pepper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMBEV S A/S 16.03% 24.66% 14.38%
Keurig Dr Pepper 15.98% 39.52% 9.55%

Analyst Ratings

This is a summary of recent recommendations and price targets for AMBEV S A/S and Keurig Dr Pepper, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMBEV S A/S 0 3 3 0 2.50
Keurig Dr Pepper 0 4 2 0 2.33

AMBEV S A/S presently has a consensus target price of $7.50, suggesting a potential upside of 73.21%. Keurig Dr Pepper has a consensus target price of $26.17, suggesting a potential upside of 15.53%. Given AMBEV S A/S’s stronger consensus rating and higher possible upside, equities research analysts plainly believe AMBEV S A/S is more favorable than Keurig Dr Pepper.

Dividends

AMBEV S A/S pays an annual dividend of $0.14 per share and has a dividend yield of 3.2%. Keurig Dr Pepper pays an annual dividend of $1.74 per share and has a dividend yield of 7.7%. AMBEV S A/S pays out 60.9% of its earnings in the form of a dividend. Keurig Dr Pepper pays out 38.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Keurig Dr Pepper is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

7.0% of AMBEV S A/S shares are owned by institutional investors. Comparatively, 11.6% of Keurig Dr Pepper shares are owned by institutional investors. 0.6% of Keurig Dr Pepper shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares AMBEV S A/S and Keurig Dr Pepper’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMBEV S A/S $15.01 billion 4.53 $2.30 billion $0.23 18.83
Keurig Dr Pepper $6.69 billion 4.70 $1.08 billion $4.54 4.99

AMBEV S A/S has higher revenue and earnings than Keurig Dr Pepper. Keurig Dr Pepper is trading at a lower price-to-earnings ratio than AMBEV S A/S, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

AMBEV S A/S has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Keurig Dr Pepper has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

About AMBEV S A/S

Ambev S.A., through its subsidiaries, produces, distributes, and sells beer, draft beer, carbonated soft drinks (CSD), other non-alcoholic beverages, malt, and food in the Americas. It operates through Latin America North, Latin America South, and Canada segments. The company offers beer primarily under the Skol, Brahma, Antarctic, Brahva, Brahva Gold, Extra, Budweiser, Bud Light, Stella Artois, Corona, Modelo Especial, Beck, Leffe, Hoegaarden, Presidente, Brahma Light, President Light, Bohemia, The One, Quilmes Clásica, Paceña, Taquiña, Huari, Becker, Báltica, Ouro Fino, Pilsen, Patricia, Labatt Blue, Alexander Keith's, Kokanee, Banks, and Deputy brands. It also provides CSD, bottled water, isotonic beverages, energy drinks, coconut water, powdered and natural juices, and ready-to-drink teas under the Guaraná Antarctica, Gatorade, H2OH!, Lipton Iced Tea, Fusion, Do Bem, Pepsi, Canada Dry, Squirt, Red Rock, Pepsi-Cola, Seven Up, and Frutee brands, as well as cereal bars. Ambev S.A. offers its products through a network of third-party distributors and a direct distribution system. The company was founded in 1885 and is headquartered in São Paulo, Brazil. Ambev S.A. is a subsidiary of Interbrew International B.V.

About Keurig Dr Pepper

Keurig Dr Pepper Inc. engages in the brewing system and specialty coffee businesses in the United States and Canada. The company sources, produces, and sells coffee, hot cocoa, teas, and other beverages in K-Cup, Vue, Rivo, K-Carafe, and K-Mug pods brands; coffee in traditional packaging, including bags and fractional packs; and other specialty beverages in pods. It distributes its products through at-home and away-from-home channels to retailers, including supermarkets, department stores, mass merchandisers, club stores, and convenience stores; and restaurants, hospitality accounts, office coffee distributors, and partner brand owners, as well as to consumers through its Websites. The company was founded in 1981 and is based in Waterbury, Vermont. Keurig Dr Pepper Inc. is a subsidiary of Acorn Holdings B.V.

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