A quick trivia question: what's the world's most popular brand
If you answered Budweiser, give yourself partial credit.
Belgium-based (yes, Belgium)
Anheuser-Busch InBev (NYSE:
is the world's largest brewer. And its top brand isn't Budweiser --
it's actually Bud Light. Even so, Bud Light is only the world's
second-most popular beer.
The correct answer is a product I doubt you've ever heard of --
Snow beer, the most popular beer in China.
Snow is a product of China Resources Snow Breweries, a joint
venture owned by U.K.-based
China Resources Enterprise (
Snow is estimated to control 5% of the global beer
, more than both Bud Light and Budweiser combined. Five percent may
not sound like much, but it comes to more than 17 billion bottles
of beer a year.
Why am I bringing this up?
In the past few months, "sin stocks" (companies that produce goods
like alcohol and tobacco) have been on a tear. The four tobacco and
alcohol stocks in my
portfolios have delivered average total returns of 11.5% year to
Thanks to global economic concerns, investors have flocked to this
stable corner of the market. Of course, this is nothing new.
Defensive stocks tend to do well in a volatile market.
But what most people don't realize is that some of the world's best
defensive stocks aren't based in the United States.
As disposable income and middle classes expand in China and other
, so does demand for goods and services, including alcohol and
In the case of beer, China is by far the largest beer market in the
world, more than twice the size of the United States, the world's
No. 2, with 6.3 billion gallons in annual sales.
And while sales languish in the United States (down 1% in 2011,
according to the Brewers Association, a trade group) and much of
the West, sales are on the rise in China and other emerging-market
countries -- and they have plenty of room to run.
On a per-capita basis, Chinese consumers drink just a little more
than 37 liters of beer per year, compared with 77 liters in the
United States, 72 in Brazil and 115 for Germany.
That's good news for SABMiller, the world's second-largest brewer.
ending March 31, more than three-fourths of SABMiller's
before interest, taxesdepreciation andamortization (
) came from emerging markets.
About a third of SABMiller's EBITDA originated in Latin America,
and the company had the strongest position of any brewer in the
fast-growing African market. Of course, it also owns a large stake
in the world's most-popular beer, Snow. All told, SABMiller owns
more than 200 individual beer brands.
Better yet, since the start of June the
are up 21%.
Many American investors mistakenly assume that it's difficult to
purchase shares of an international company like SABMiller. After
all, the company is based in the U.K., and it does most of its
business in foreign countries.
But the truth is that it's easier than ever to invest in foreign
One of the best ways to start profiting from high-quality foreign
businesses is by purchasing shares of American depositary receipts
(ADRs). The name sounds complex, but I assure you that ADRs are
very easy to understand. ADRs trade right here in the United States
just like any other stock.
Royal Dutch Shell (NYSE:
, are all foreign companies that have ADRs that trade on U.S.
exchanges. You can buy them just as easily as you would a share of
General Electric (NYSE:
But not every company elects to have its shares trade as ADRs on
the U.S. markets. That's why you'll also find many large foreign
companies that trade "over the counter."
Action to Take -->
Most people equate this exchange with risky penny stocks. But major
global companies like
Roche (OTC: PHHBY)
, and yes, SABMiller, trade here. You can buy shares of SABMiller
using your existing brokerage account. Just search for ticker
Of course, with investing, nothing is 100% certain. Investing
abroad isn't guaranteed to make you money. But if you're ignoring
international markets, then there's no doubt you're missing out on
some of the world's best investment opportunities... including
International companies also pay higher yields than their U.S.
counterparts. Consider that while 17 profitable stocks in the U.S.
yield 12% or more, there are over 200 such stocks abroad. For more
information on these stocks -- including the full list of 17
companies yielding above 12% --
visit this link here.
-- Paul Tracy
Paul Tracy does not personally hold positions in any securities
mentioned in this article. StreetAuthority LLC owns shares of BUD
in one or more if its "real money" portfolios.
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