Anheuser Busch Inbev NV (NYSE:BUD) is down 8% in the past three months and the brewer behind big brands like Bud and Corona could be a great buy on the dip. Year-to-date the stock has managed returns of less than 6% but in the past five years the share price has grown 27%.
This recent decline has been so significant that Anheuser’s stock is now oversold. The Relative Strength Index (RSI) for the stock dipped below 30 as of the close on Monday, and that could be a sign that a reversal could be coming. An RSI level of 30 or less indicates there has been significant selling recently and that the stock could be due for an increase soon.
In its most recent quarter, Anheuser saw sales grow by 33% year-over-year while profits more than tripled last year’s tally. Not only has the company showed strong growth, but it also pays an attractive dividend of over 5% per year.
The share price is not too far from its 52-week low and investors may not want to wait too long before buying as it’s only a matter of time before the stock recovers. The one big plus about Anheuser’s stock is that it operates in what I would consider to be a recession-proof industry.
Although alcohol is not an essential expense by any means, it’s an industry that can do well in good times and in bad, especially when people want to drown their sorrows in a bottle of beer. For that reason, investing in this top brewing stock is a safe investment that could generate you great returns.
