Ambev S.A. (ABEV)

"The true investor

Ambev delivers a compelling 7% dividend yield, supported by strong operating cash flow, a net cash position, and low reinvestment needs, making it attractive for income-focused investors. Despite macro challenges, Ambev maintains outstanding margins, with a 30% EBITDA margin and 25% EBIT margin, reflecting pricing power, cost discipline, and product mix optimization. The stock is deeply undervalued, trading at 6x EV/EBITDA and 12x P/E FWD—well below peers and historical levels—offering meaningful re-rating potential as fundamentals remain solid.

ACIU, ABEV and ALX have been added to the Zacks Rank #5 (Strong Sell) List on August 6, 2025.

Ambev offers strong margins, robust cash flow, and a leading beer portfolio, yet trades at a discount, due to Brazil risk and currency headwinds. The company's minimum 40% dividend payout and high yield provide an attractive income stream and a safety net for investors willing to take the risk of investing in the region. Ambev is well-positioned for premiumization and non-alcoholic trends, with growth potential tied to Brazil's economic recovery and possible long-term rate cuts.

Ambev S.A. (NYSE:ABEV ) Q2 2025 Earnings Conference Call July 31, 2025 11:30 AM ET Company Participants Carlos Eduardo Klutzenschell Lisboa - Chief Executive Officer Guilherme Fleury de Figueiredo Ferraz Parolari - Chief Financial and Investor Relations, Member of Executive Board & Shared Services Officer Conference Call Participants Felipe Ucros Nunez - Scotiabank Global Banking and Markets, Research Division Henrique R. Brustolin - Banco Bradesco BBI S.A.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Ambev's revenue grew 6.7% y/y with a slight increase in volume and a more profitable brand mix. Strategy aims to defend market share. Margins improved, with cost and SG&A control, however, further growth seems limited. Strong cash position (BRL 17.1 billion) sustains dividends and ensures operational solidity.

The MSCI Emerging Markets Index (EEM) is up +10% YTD in a rare rally as President Donald Trump's back-and-forth tariff policies weigh on the US dollar. Stocks have begun to rebound amid a temporary trade truce between the U.S. and China, but tariffs and inflation still threaten further volatility down the line. Geographical diversification is a great way to hedge against volatility while also complementing a well-balanced portfolio.

Investors interested in Beverages - Alcohol stocks are likely familiar with Ambev (ABEV) and Constellation Brands (STZ). But which of these two companies is the best option for those looking for undervalued stocks?

Ambev is achieving decent EBITDA growth thanks to ongoing premiumization on the back of its 2024 investments. Specifically, super premium and premium categories which include Corona are growing in the 20s, offsetting pressure in popular beers through Carnival. The non-alcoholic portfolio is also performing well, and Argentina is also looking up economically with decent volumes despite austerity.

Ambev S.A. (NYSE:ABEV ) Q1 2025 Earnings Conference Call May 8, 2025 11:30 AM ET Company Participants Carlos Lisboa – Chief Executive Officer Guilherme Fleury – Chief Financial, Investor Relations Officer Conference Call Participants Henrique Brustolin - Bradesco BBI Thiago Duarte – BTG Isabella Simonato – Bank of America Lucas Ferreira – JPMorgan Guilherme Palhares - Santander Leonardo Alencar - XP Investimentos Operator Good afternoon and thank you for waiting. We would like to welcome everyone to Ambev's 2025 First Quarter Results Conference Call.

SÃO PAULO, March 12, 2025 /PRNewswire/ -- Ambev S.A. [B3: ABEV3; NYSE: ABEV] announces that the Company's annual report on Form 20-F for the year ended December 31, 2024 was filed with the U.S. Securities and Exchange Commission - SEC (www.sec.gov) on March 12, 2025 and is available on the Company's website (ri.ambev.com.br) and also on the Company's page on SEC's database (www.sec.gov/edgar/).

I recommend buying Ambev shares due to its attractive valuation and improved momentum of Brazilian assets despite mixed 4Q24 results and challenging outlook. Ambev's net revenue grew 4.2% y/y, driven by strong performance in Canada, while Brazil's beer segment underperformed due to weather conditions and discounts. Despite cost pressures, Ambev maintained stable gross margins and a strong financial position, with net income growth of 7.5% y/y and net cash of BRL 26 billion.

Ambev S.A. (NYSE:ABEV ) Q4 2024 Earnings Conference Call February 26, 2025 10:30 AM ET Company Participants Carlos Lisboa – Chief Executive Officer Lucas Lira – Chief Financial, Investor Relations and Shared Services Officer Conference Call Participants Thiago Duarte – BTG Carlos Laboy – HSBC Isabella Simonato – Bank of America Lucas Ferreira – JPMorgan Felipe Ucros – Scotia Ricardo Alves – Morgan Stanley Operator Good morning, good afternoon and thank you for waiting. We would like to welcome everyone to Ambev's 2024 Fourth Quarter Results Conference Call.

Ambev S.A. is a Strong Buy due to its ultra-cheap valuation, including 13% free cash flow and 5%+ dividend yields. Despite industry challenges from weak consumer demand to potential tariffs in a trade war, Ambev's valuation metrics are very attractive - the lowest since the 2009 Great Recession bottom. The company's robust profit margins and minor debt level enhance its appeal, with negligible sales in the U.S.

Ambev shares have been an incredibly weak performer in recent years. Currency depreciation has hurt dollar returns and the company's margins, with the latter exacerbated by recent cost inflation and market dynamics in Brazil. These shares have also suffered a pretty severe valuation de-rating. However, at 12x earnings and sitting on net cash, Ambev looks cheap.