Earnings

Set Sail With Anheuser-Busch InBev SA/NV (BUD), F.N.B. Corporation (FNB)

The shares of Anheuser-Busch InBev SA/NV have decreased by more than -14.41% this year alone. The shares recently went up by 0.44% or $0.42 and now trades at $95.48. The shares of F.N.B. Corporation (NYSE:FNB), has slumped by -2.68% year to date as of 05/14/2018. The shares currently trade at $13.45 and have been able to report a change of 3.14% over the past one week.

The stock of Anheuser-Busch InBev SA/NV and F.N.B. Corporation were two of the most active stocks on Monday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Next 5Y EPS Growth: 12.60% versus 9.50%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that BUD will grow it’s earning at a 12.60% annual rate in the next 5 years. This is in contrast to FNB which will have a positive growth at a 9.50% annual rate. This means that the higher growth rate of BUD implies a greater potential for capital appreciation over the years.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. BUD has an EBITDA margin of 22.45%, this implies that the underlying business of FNB is more profitable. The ROI of BUD is 7.80% while that of FNB is 11.30%. These figures suggest that FNB ventures generate a higher ROI than that of BUD.

Cash Flow



The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, BUD’s free cash flow per share is a positive 0, while that of FNB is positive 8.14.

Valuation

BUD currently trades at a forward P/E of 17.15, a P/B of 2.54, and a P/S of 2.95 while FNB trades at a forward P/E of 10.87, a P/B of 1.01, and a P/S of 4.09. This means that looking at the earnings, book values and sales basis, BUD is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of BUD is currently at a -19.97% to its one-year price target of 119.30. Looking at its rival pricing, FNB is at a -15.78% relative to its price target of 15.97.




When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), BUD is given a 2.10 while 1.80 placed for FNB. This means that analysts are more bullish on the outlook for BUD stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for BUD is 1.47 while that of FNB is just 4.61. This means that analysts are more bullish on the forecast for BUD stock.

Conclusion

The stock of Anheuser-Busch InBev SA/NV defeats that of F.N.B. Corporation when the two are compared, with BUD taking 6 out of the total factors that were been considered. BUD happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, BUD is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for BUD is better on when it is viewed on short interest.

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