Analyzing Ambev (NYSE:ABEV) and Monster Beverage (NASDAQ:MNST)

Ambev (NYSE:ABEV) and Monster Beverage (NASDAQ:MNST) are both large-cap consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Earnings and Valuation

This table compares Ambev and Monster Beverage”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambev	$15.80 billion	3.30	$2.78 billion	$0.20	16.52
Monster Beverage	$8.29 billion	10.91	$1.91 billion	$1.08	42.77

Ambev has higher revenue and earnings than Monster Beverage. Ambev is trading at a lower price-to-earnings ratio than Monster Beverage, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Ambev has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Monster Beverage has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.

Profitability

This table compares Ambev and Monster Beverage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ambev	18.47%	17.48%	11.14%
Monster Beverage	23.08%	26.02%	21.21%

Insider & Institutional Ownership

8.1% of Ambev shares are held by institutional investors. Comparatively, 72.4% of Monster Beverage shares are held by institutional investors. 8.1% of Monster Beverage shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Ambev and Monster Beverage, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambev	2	3	1	0	1.83
Monster Beverage	0	8	15	1	2.71

Ambev currently has a consensus target price of $3.13, suggesting a potential downside of 5.22%. Monster Beverage has a consensus target price of $74.05, suggesting a potential upside of 60.31%. Given Monster Beverage’s stronger consensus rating and higher possible upside, analysts plainly believe Monster Beverage is more favorable than Ambev.

Summary

Monster Beverage beats Ambev on 12 of the 15 factors compared between the two stocks.

About Ambev

Ambev S.A., through its subsidiaries, engages in the production, distribution, and sale of beer, draft beer, carbonated soft drinks, malt and food, other alcoholic beverages, and non-alcoholic and non-carbonated products in Brazil, Central America and Caribbean, Latin America South, and Canada. It offers beer primarily under the Skol, Brahma, Antarctica, Brahva, Budweiser, Bud Light, Beck, Leffe, Hoegaarden, Balboa ICE, Balboa, Atlas Golden Light, Atlas, Bucanero, Cristal, Mayabe, Presidente, Presidente Light, Brahma Light, Bohemia, The One, Corona, Modelo Especial, Stella Artois, Quilmes Clásica, Paceña, Taquiña, Huari, Becker, Cusqueña, Michelob Ultra, Busch, Pilsen, Ouro Fino, Bud 66, Banks, Deputy, Patricia, Labatt Blue, Alexander Keith’s, and Kokanee brands. The company also provides carbonated soft drinks, bottled water, isotonic beverages, energy drinks, coconut water, powdered and natural juices, and ready-to-drink teas under the Guaraná Antarctica, Gatorade, H2OH!, Pepsi Black, Lipton Iced Tea, Fusion, Pepsi-Cola, Canada Dry, Squirt, Red Rock, Red Bull, Seven Up, Nutrl, Bud Light Seltzer, Palm Bay, and Mike’s brands. It 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 Monster Beverage

Monster Beverage Corporation, through its subsidiaries, engages in development, marketing, sale, and distribution of energy drink beverages and concentrates in the United States and internationally. The company operates through three segments: Monster Energy Drinks, Strategic Brands, Alcohol Brands, and Other. It offers carbonated non-carbonated energy drinks, ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks and single-serve still waters, and sodas that are considered natural, sparkling juices, and flavored sparkling beverages. The company sells its products to full service beverage bottlers/distributors, retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, food service customers, value stores, e-commerce retailers, and the military; and concentrates and/or beverage bases to authorized bottling and canning operations. It provides its products under the Monster Energy, Monster Energy Ultra, Monster Rehab, Monster Energy Nitro, Java Monster, Punch Monster, Juice Monster, Muscle Monster, Espresso Monster, Monster Tour Water, Fury, Monster MAXX, Caffe Monster, Monster Hydro, Monster HydroSport Super Fuel, Monster Dragon Tea, Reign Total Body Fuel, and Reign Inferno Thermogenic Fuel, Reign Storm, Bang Energy, NOS, Full Throttle, Burn, Mother, Nalu, Ultra Energy, Play and Power Play (stylized), Relentless, BPM, BU, Gladiator, Samurai, Live+, Predator, and Fury brands. The company was formerly known as Hansen Natural Corporation and changed its name to Monster Beverage Corporation in January 2012. Monster Beverage Corporation was founded in 1985 and is headquartered in Corona, California.