Anheuser-Busch Inbev planned an IPO for its Asian subsidiary, Budweiser Brewing Co. APAC Ltd., that was shelved by Anheuser-Busch’s management team after it appeared that the company would be unable to fetch a high enough price for its IPO.
There are two reasons why the initial public offering did not come to fruition and had to get tabled.
First, Anheuser-Busch priced the IPO at a lofty valuation. It wanted to price its IPO between 40 and 47 Hong Kong dollars (which is about $5 or $6 in US dollars) and sell about 1.5 billion shares for an IPO in the range of $8.3 billion to $9.8 billion. This was ambitious pricing, to say the least, because Budweiser’s Asian units only generate $323 million in net profit so the valuation was approximately 30x earnings. Based upon investor presentations, the five-year growth rate for Budweiser’s Asian brewing arm is 5.5% annual earnings … Read the rest of this article!
In the entire history of the American capital markets, this fact remains true: there has never been a year in which 10% of the companies that have been raising their dividends annually for more than 25 years went on to fail to raise their dividend in the subsequent year. That is to say, in a century that saw the Great Depression, the 1973-1974 bear market, the 9/11 terrorist attacks, and the 2008-2009 financial crisis, there was never a year in which this statement proved false: “I hold nothing but stocks that have been raising their dividends for 25+ consecutive years, and at least 90% of them raised their dividend this year.”
For someone that is starting to build a portfolio, the Exxons, Coca-Colas, 3Ms, Johnson & Johnsons, Colgate-Palmolives, Becton Dickinsons, and Emerson Electrics are where the research should begin. If you are interested in something resembling a bullet-proof portfolio in … Read the rest of this article!