Boston Beer is best known for its well-known brand, Sam Adams. And that brand is now offered in a “Sam Can.” Sam Adams spent $1 million on improving the beer can, and this investment has led to slightly better taste. Other basic features for the “Sam Can” include a flared lip and a wider top. If you plan on flying with JetBlue Airways Corporation (NASDAQ:JBLU) at any point in the near future, then you will be happy to know that Sam Adams’ Sam Cans will be available for purchase.
This type of innovation and maneuvering shows how Boston Beer’s management stays ahead of the game.
Anheuser-Busch InBev NV (ADR) (NYSE:BUD) is by far the largest player of this group. Annual revenue has been inconsistent, but earnings have substantially improved over the past three years. Since Anheuser-Busch InBev NV (ADR) (NYSE:BUD)‘s IPO, its stock has seen a steady ascent. Considering the company’s close to 50% U.S. market share for beer sales, over 200 brands (including Budweiser, Bud Light, Michelob, and Becks), and strategic acquisitions, the same type of steady performance is very possible in the future.
Below is a chart showing Anheuser-Busch’s performance versus peers over a five-year time frame:
As you can see, Sam Adams has been the big winner, but looking ahead, keep in mind that Sam Adams is the most expensive, and that it doesn’t pay a dividend.
Anheuser-Busch might not have as much growth potential as its peers since it’s a mature company, but it’s likely to be the most resilient to economic downturns thanks to its broad brand portfolio and sheer size. Anheuser-Busch also yields 2.1%.
Conclusion
All three aforementioned companies offer different types of investment opportunities.
Boston Beer is a good momentum play, but as is the case with most momentum plays, risks are high. If any bad news breaks, it could lead to a gap down.
Anheuser-Busch is the best option for those who are looking for a defensive play with a little yield.
Molson Coors is a good option for investors who don’t worry about broader market conditions. If you want to invest in an innovative company with strong leadership and growth potential, then consider Molson Coors.
Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Boston Beer and Molson Coors Brewing Company. The Motley Fool owns shares of Boston Beer.
The article Should You Tap Into Or Out of Molson Coors? originally appeared on Fool.com and is written by Dan Moskowitz.
Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
