The rain poured in Europe this past summer, but that’s not the only thing it’s diluted…
The world’s third-largest brewer, Heineken (HEINY), handed in Q3 numbers, and they aren’t very refreshing. Thanks to a wet summer in Europe, consumers drank less of the Dutch brewer’s beverage.
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Just at open, shares were hit and remain lower an hour or so into trade…
But after missing the mark, with its beer sales reporting less than expected, the company has taken time to assess exactly what’s happened.
Rain or Shine
The brewer, which makes not only Heineken, but also Sol and Tiger, said beer sales barely changed in the third quarter.
In Eastern and Western Europe, sales declined… but everywhere else, they actually increased.
Consider these factors, too: Eastern Europe faced Russian laws on alcohol, a weakening economy, and competitor price pressure in Poland (in addition to the poor weather).
On a sunnier note, strongest growth came from the Asia-Pacific region, with Vietnam and Malaysia both boasting strong volume increases of Heineken’s Tiger brand.
Taking the bigger picture into account, the company claims that it’s still on track to hit its margin expansion targets, keeping a full-year outlook in mind.
Before You Pick up That Beer
Overall, the brewing industry can be quite lucrative, but it’s really a matter of knowing where to look.
Of the three companies mentioned, Anheuser-Busch boasts the highest dividend yield of 2.1%, with Carlsberg and Heineken coming after it with 1.0% and 1.7% yields, respectively.
But when taking total yields (dividend yield plus net buyback percentage) into account, they all pan out to be quite stale.
Income Research Team