Beer Stocks in Focus: BUD’s Dividends and Covered Calls
It all started, few years ago, with a cold bottle of Kingfisher beer in hand, sipped slowly under the Indian sun. As I savored the crisp taste, I learned that Kingfisher is owned by Heineken, a global brewing giant.
That little tidbit sparked my curiosity about beer stocks, and I decided to dive into the world of brewery investments. During my learning curve, I stumbled upon a fascinating rivalry in the beer industry: the tussle between Budweiser (owned by Anheuser-Busch InBev, ticker BUD on the NYSE) and, well, Budweiser. Yes, it’s a bit confusing, so let me explain.
The “Bud vs. Budweiser” fight isn’t about Anheuser-Busch’s Budweiser battling itself, but rather a decades-long trademark dispute between Anheuser-Busch and the Czech brewery Budějovický Budvar.
Both produce beers called "Budweiser," rooted in the name of the Czech town České Budějovice (Budweis in German). Anheuser-Busch, the American giant behind BUD stock, launched its Budweiser in 1876, while Budvar claims a brewing heritage dating back centuries.
This clash has led to legal battles across multiple countries, with outcomes varying by region—Anheuser-Busch’s Budweiser dominates in the U.S., while Budvar’s version holds sway in parts of Europe. It’s a classic tale of branding, heritage, and global market turf wars, and it made me realize just how complex the beer business can be.
Inspired by this, I hatched a casual plan: why not invest in BUD stock every now and then, perhaps after enjoying a bottle of beer? I’m no beer snob, but I do appreciate a good brew, and the idea of pairing sips with stock picks sounded fun.
However, my grand plan never quite took off. I dipped my toes in, buying a measly 0.2 shares of BUD—barely enough to call it a position. After holding it briefly and eking out a small profit, I sold it off.
My attention shifted to a more lucrative strategy: a covered call plan with NVIDIA stock, which promised bigger returns than my beer-inspired dabbling.
Still, the experience left me intrigued by BUD, so let’s take a closer look at its technical and fundamental picture as of March 31, 2025.
Technical Analysis of BUD Stock
As of March 31, 2025, BUD’s stock traded around $62.04
BUD has shown relative stability over the past few months, with weekly volatility around 3%, which is tame compared to the broader U.S. market.
The stock’s 52-week range spans $45.94 to $67.49, suggesting it’s currently trading closer to its high than its low—a sign of resilience, though not explosive growth
From a technical perspective, BUD’s moving averages paint a neutral picture. The 50-day moving average sits near $61, while the 200-day average is around $59, indicating a mild uptrend but no breakout momentum.
Resistance looms near $67, the 52-week high, while support holds around $55–$57.
If you’re a trader, the Relative Strength Index (RSI) likely sits in the 50–60 range (a common level for stable stocks), suggesting neither overbought nor oversold conditions. Overall, BUD’s technicals scream “steady,” not “stellar”—a reliable plodder in a volatile market.
Fundamental Analysis of BUD Stock
Now, let’s pop the cap on BUD’s fundamentals. Anheuser-Busch InBev (AB InBev) is the world’s largest brewer, boasting a portfolio of 500+ brands, including Budweiser, Corona, and Stella Artois. With a market cap of roughly $120 billion, it’s a heavyweight in the beverage sector.
In 2024, the company reported revenues of $59.77 billion (up 0.65% year-over-year) and earnings of $5.86 billion (up 9.62%), showing modest top-line growth and stronger profitability gains.
P/E Ratio
BUD’s trailing twelve-month (TTM) price-to-earnings (P/E) ratio isn’t explicitly quoted in recent data, but we can estimate it. With an EPS of $2.92 for 2024 and a current price of $62, the P/E comes out to approximately 21.2 ($62 / $2.92).
This is reasonable for a mature consumer goods company—neither dirt-cheap nor overpriced compared to the S&P 500 average of around 25.
Analysts expect EPS to dip slightly in 2025 (e.g., -4% to $2.80), which could nudge the forward P/E closer to 22, assuming the price holds steady.
Dividends
BUD offers a dividend, though it’s not a high-yield play. The annual dividend is $0.78 per share, paid annually, yielding about 1.26% at $62.
This is modest compared to, say, a utility stock, but it’s sustainable, with a payout ratio of just 18.4% of earnings and a cash payout ratio of 16.6%. The company slashed its dividend during the pandemic to preserve cash, but recent increases (e.g., from $0.646 to $0.779 in 2025 projections) signal confidence in its financial health.
For dividend seekers, BUD offers a small but reliable sip.
Covered Calls
Here’s where BUD gets interesting for options fans like me. With a stable price and moderate volatility, it’s a decent candidate for covered calls.
Let’s say you own 100 shares at $62 (a $6,200 investment). A one-month call option with a $65 strike might fetch a premium of $1–$2 per share, depending on implied volatility and time decay—call it $150 total.
That’s a 2.4% return in a month, or 29% annualized, on top of the 1.26% dividend yield. If the stock gets called away at $65, you’d also pocket a $300 capital gain, boosting your total return.
The catch? BUD’s lack of big upward swings limits the premium potential compared to tech highfliers like NVIDIA. Still, it’s a low-risk way to juice returns on a sleepy stock.
Other Metrics
Revenue Growth: Over the past five years, AB InBev’s revenue growth has been sluggish, averaging 1–2% annually, reflecting mature markets and shifting consumer tastes (e.g., toward seltzers and non-alcoholic drinks).
Debt: The company carries significant debt from its 2016 SABMiller acquisition, but it’s deleveraging—net debt/EBITDA has improved, and S&P recently upgraded its outlook to “positive.”
Free Cash Flow: Recent estimates peg free cash flow at $8–$10 billion annually, ample to cover dividends and debt reduction.
Why BUD Didn’t Stick in My Portfolio
Despite its merits, BUD never became a mainstay for me. Its fundamentals are solid—global scale, iconic brands, and decent cash flow—but the growth story feels flat.
Beer volumes are declining in some markets, and currency headwinds (e.g., in Argentina and China) add risk.
My tiny 0.2-share experiment yielded a profit, but the effort wasn’t worth it compared to NVIDIA’s volatility, where covered calls can yield double-digit monthly returns. BUD’s a safe bet for conservative investors, but I’m chasing bigger fish.
So, here’s to BUD—a stock I admired over a beer but ultimately left behind. Maybe I’ll revisit it someday. For now, I’ll stick to sipping and speculating elsewhere. Cheers!