AB InBev vs. Boston Beer: Which Stock is Poised to Brew a Better Return?

Core Insights - The article compares two major players in the alcoholic beverage market: Anheuser-Busch InBev (AB InBev) and The Boston Beer Company (SAM), highlighting their distinct business models and growth strategies in a rapidly changing consumer landscape [1][2]. AB InBev (BUD) - AB InBev maintains a dominant position in the global brewing industry with a diverse portfolio of over 500 brands across more than 150 countries, leveraging scale and local market agility [3]. - In Q1 2025, BUD reported revenues of $13.6 billion, a decrease of 6.3% year-over-year, but achieved organic revenue growth of 1.5%, driven by premiumization and disciplined revenue management [4]. - The company's megabrands, including Budweiser, Stella Artois, and Corona, saw a revenue increase of 4.4%, with strong performance from the Corona brand [5]. - BUD's Beyond Beer portfolio experienced a 16.6% revenue rise in Q1 2025, supported by growth in brands like Cutwater and Nütrl [6]. - The company is focused on higher-margin products and innovative offerings, aiming for year-over-year EBITDA growth of 4-8% in 2025 [7]. - BUD's stock performance over the past three months showed a total return of 13.9%, outperforming the S&P 500's return of 5.9% [18]. - Valuation-wise, BUD trades at a forward P/E multiple of 18.75X, which is below SAM's 19.98X, indicating a comparatively cheaper valuation with strong growth potential [20][21]. Boston Beer Company (SAM) - Boston Beer has established itself as a prominent U.S. craft brewer, focusing on quality and innovation while diversifying its product lineup beyond traditional beer [8][9]. - In Q1 2025, SAM's net revenues increased by 6.5%, with a shipment volume of 1.7 million barrels, although depletions fell by 1% year-over-year [12]. - The company faces challenges with its flagship Samuel Adams brand, which has struggled to maintain appeal among younger consumers, prompting a strategic growth plan focused on brand strengthening and cost-saving initiatives [10][11]. - SAM's diversification strategy includes expanding its Beyond Beer portfolio, but it is also dealing with tariff impacts estimated to reduce earnings per share by $1.25-$1.90 in 2025 [13]. - SAM's stock has seen a decline of 11.4% over the past three months, contrasting with BUD's performance [18]. - The Zacks Consensus Estimate for SAM indicates a year-over-year sales rise of 2.1% for 2025, but a decline in EPS by 3% [14]. Conclusion - AB InBev is positioned as the stronger investment case due to its solid stock performance, attractive valuation, and clear growth trajectory, while Boston Beer, despite its long-term promise, faces significant challenges [23][24].