Anheuser-Busch (BUD) just reported its third quarter profit fell fell 5.7 percent to $666.1 million, or 90 cents a share in the three-month period ending Sept. 30. That compares with profit of $706.7 million, or 95 cents a share, a year earlier.
InBev has said it would not reduce or change its offer of $70 a share, even as Anheuser-Busch's share price has dropped amid larger market turmoil. Anheuser-Busch shareholders are set to vote on the deal next Wednesday. InBev shareholders have already approved the deal.
The Bottom Line
The story for BUD now squarely focuses on the deal with InBev being completed. We had recommended taking profits when the stock had jumped up on the deal, and think the potential risk/reward is still the same despite the end of the year getting a bit closer. If for any reason there is further deterioration in the credit markets, the stock would likely have about $10 in downside risk, with $5 of upside if the deal does get done and closes on time. We are monitoring the situation closely and will keep investors posted if we believe there is an opportunity in the name.
Anheuser-Busch (BUD) is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
Tom Reese/Paul Rubillo, Dividend.com
