An Overview of AnheuserBusch, Business, College Term Papers.com


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An Overview of AnheuserBusch

An Overview of AnheuserBusch Anheuser-Busch started the month of October out at 41.75. Which is relatively high, compared to the 52-week high/low which was 27.31-44.94, for that day. The high/low a year ago was 32.3-42.0 and for two years ago it was 21.5-34.1. As you can see, the high/low has rose over the years. The price-earning ratio on the starting day was 26.31% while the dividend was .66¢ per share. On start day .00316% of 905,807,000 shares were traded. That equals 28,623 shares. Total debt liability is over 5.1 billion dollars whereas the total sales are over 11.7 billion. Anheuser-Busch is in two very different industries, entertainment (theme parks) and alcohol. I couldn't find a company that had holdings in both industries such as Anheuser-Busch, so I picked to companies, one from each industry. Comparing Anheuser to Heineken, both from the alcohol industry, you can see that Heineken stock, worth 55.13, is worth over ten dollars more than Anheuser stock, worth 41.75. Heineken has been increasing in popularity, in the United States, over the past few years. I chose to compare Anheuser to the most well known theme park operator in the United States, Disney. Disney is trading at 37.31 a substantial amount less than Anheuser-Busch. Anheuser has offices, breweries, and approximately 62,000 shareholders around the world. The head office is located at One Busch Place, St. Louis, Missouri. Anheuser has holdings in two very different markets. Besides the alcohol industry, Anheuser-Busch also owns and operates nine theme parks in the United States. They own the well-known Busch Gardens, located in Florida and Virginia, and Sea World, located in Florida, California, Texas, and Ohio. They also own two water parks, Water Country USA, located in Virginia, and Adventure Island, located in Florida, a family friendly amusement park, Sesame Place, and Discovery Cove, a reserve where you can interact with dolphins and other sea creatures. We could live without the industries that Anheuser-Busch deals in. Would we want to though, probably not? They add excitement to our lives. The theme park and alcohol industries are huge. It is all because we, as Americans, want to have fun. The main alcoholic beverage made by Anheuser-Busch is beer. The varieties they make are innumerable. Anheuser is solely responsible for the Budweiser, Michelob, O'Douls, Red Wolf, Ziegenboch, Pacific Ridge, Natural Light, Hurricane, King Cobra, Tequiza, and Doc Otis Malt Beverage lines. They are jointly responsible with various companies for the Redhook Ale, Widmer Brothers, and Kirin Brewery lines. Their international holdings include 50% ownership in a brewing company in Mexico, Grupo Modelo, the maker of Corona. Anheuser-Busch began in 1860 when Eberhard Anheuser bought a failing Bavarian Brewery. His son in law, Adolphus Busch, went to work for him and took over the company when Eberhard died in 1880. Busch built the brewery into a national leader, despite three failures early in the business. Anheuser-Busch was the first to use pasteurization, artificial refrigeration, and the first to bottle beer extensively. This allowed the company to provide a higher-quality beer more efficiently and to make it a nationally known beer. Budweiser was introduced in 1876 as a beer that was made with the highest quality ingredients and traditional brewing methods. Twenty years later came Michelob. A beer marketed as a connoisseur's beer. The company made it through wars, depressions, and the prohibition with the help of the Adolphus' grandsons. Today it is still one of the world's most known breweries. The test of time and the quality of the products keep it there. The focus of Anheuser-Busch is still to expand as far as possible. The introduction to new products and the development of other ventures pushed Anheuser ahead of the rest. With the development of their theme parks, Anheuser has opened new doors for themselves. The sky is the limit for the company and they are set on it. The recent developments for Anheuser-Busch are few. The company recently reported higher earnings for the third quarter. The reason for this rise in earnings is the price increase Anheuser put into effect recently. Their holdings in Grupo Modelo, which Anheuser owns 50%, have also added to their earnings. Corona, made by the Mexican brewer, is becoming one of the biggest brands imported into the United States.(WSJ, Oct.26) Anheuser has also made news with the release of their new commercial. The commercial hits directly at Heinekin, the beer known to attract the so-called yuppies. It makes the viewer think that if you drink Busch beer you will get the girl of your dreams. This add obviously is directed toward young males.(WSJ, Oct 26.) Anheuser also recently sold $200 million worth of 30-year bonds. They priced the bonds to yield better than the treasurys.(WSJ, Oct. 3) Unfortunately, Anheuser-Busch didn't have a lot of activity and the activity it did have is fairly unexplainable. One of my suggestions is that the very predictable and stable market of alcohol and theme parks led to a very mundane month. The movement that I thought was possible just wasn't there. My other suggestion is that the price dip on October 25 was due to some of the negative things that were said about alcohol and colleges. There has been some pretty bad things put out there about college students and binge drinking. I think that the company is a good, sound investment for the future, if you plan on keeping your money in there for a while. It is a very stable stock that should go up in the market. It is in an industry that will forever be around, unless of course there should ever be another prohibition, which is not likely. Even if there were another prohibition, their theme parks would help keep them afloat in the market. The alcohol and theme park industry is expanding but not at a very fast rate. As long as there are people who drink alcohol and children, Anheuser-Busch should be doing well. I did pretty well considering the inactivity of my stock. I could have made more if I would have done a different trade scenario but the way I traded is more realistic. I bought 2500 share on October 25 at $39.63 per share and sold it on October 30 at $46.38. I made a profit of $13,367.50. I don't think I did too badly. I would purchase the stock now and hold it for a long time. I think that the future of the company is awesome and very profitable. It would be a good stock for both capital gains and income. The dividend they pay is pretty healthy if you own a lot of their stock and I see the stock increasing in value in the future. Bibliography:

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