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Why the world’s most profitable beer company should be part of an Australian investor’s portfolio

With 18 brands producing a $1 billion in annual sales, Anheuser-Busch Inbev is the largest and most profitable beer company in the world and has six of the top 10 most valuable beer brands in the world.

Beer companies were a core part of an Australian investor’s portfolio because of the high levels of profitability, strong cash flow generations and rising dividends.

The portfolio includes six of the 10 most valuable beer brands in the world.

With both Lion Nathan and Fosters Group taken over by overseas companies this has left a void in most Australian portfolios.

Insync Funds Management invests in companies that complement Australian equity portfolios. A core holding in the Insync Global Titans fund is Anheuser-Busch Inbev.

It is the largest and most profitable beer company in the world operating in some of the largest and most profitable beer pools including the US, Brazil, Russia and China. Some of its well‐known brands include Budweiser, Becks, Corona and Stella Artois. Anheuser‐Busch is the leading global brewer with 18 brands that generate more than $1 billion per year in sales.

AB InBev has six of the top 10 most valuable beer brands in the world.In its most recent announcement it increased the dividend by 16%. AB InBev generates mid–‐30s operating margins, well above the next profitable firm. With its growing dividend (3% yield) and share buyback potential, AB Inbev meets Insync’s hurdles of being very profitable and looking after shareholders.

Map of the most popular beers by country

 

Originally published 17 June 2015