Compañía Cervecerías Unidas (SNSE:CCU) - Share price, News & Analysis

Q: What is the Fair Price of CCU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CCU (CLP5010) is trading below our estimate of [[fair value]] (CLP15972.28)

CCU fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	3/6
Past Performance	2/6
Financial Health	4/6
Dividends	3/6

CCU Stock Overview

Compañía Cervecerías Unidas S.A. operates as a beverage company in Chile, Argentina, Bolivia, Colombia, Paraguay, and Uruguay.

Rewards

Trading at 68.6% below our estimate of its fair value

Earnings are forecast to grow 12.72% per year

Risk Analysis

Dividend of 7.98% is not well covered by earnings

Compañía Cervecerías Unidas Competitors

Embotelladora Andina

SNSE:ANDINA-B

CL$1.4t

Viña Concha y Toro

SNSE:CONCHATORO

CL$882.3b

Empresas AquaChile

SNSE:AQUACHILE

CL$985.0b

Coca-Cola Embonor

SNSE:EMBONOR-A

CL$459.2b

Price History & Performance

Summary of all time highs, changes and price drops for Compañía Cervecerías Unidas
Historical stock prices
Current Share Price	CL$5,010.00
52 Week High	CL$8,359.50
52 Week Low	CL$4,882.00
Beta	0.39
1 Month Change	-15.09%
3 Month Change	-10.54%
1 Year Change	-38.90%
3 Year Change	-43.32%
5 Year Change	-41.74%
Change since IPO	409.90%

Recent News & Updates

Aug 05

Returns On Capital At Compañía Cervecerías Unidas (SNSE:CCU) Have Stalled

If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for...

Jul 13

Here's Why Compañía Cervecerías Unidas (SNSE:CCU) Can Manage Its Debt Responsibly

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Shareholder Returns

	CCU	CL Beverage	CL Market
7D	-3.6%	-1.6%	-0.03%
1Y	-38.9%	-22.5%	-1.8%

Return vs Industry: CCU underperformed the CL Beverage industry which returned -22.7% over the past year.

Return vs Market: CCU underperformed the CL Market which returned -2.9% over the past year.

Price Volatility

Is CCU's price volatile compared to industry and market?
CCU volatility
CCU Average Weekly Movement	3.2%
Beverage Industry Average Movement	3.5%
Market Average Movement	3.6%
10% most volatile stocks in CL Market	7.3%
10% least volatile stocks in CL Market	1.4%

Stable Share Price: CCU is not significantly more volatile than the rest of CL stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: CCU's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1850	9,395	Patricio Jottar Nasrallah	https://www.ccu.cl

Compañía Cervecerías Unidas S.A. operates as a beverage company in Chile, Argentina, Bolivia, Colombia, Paraguay, and Uruguay. The company operates through three segments: Chile, International Business, and Wine. It produces and sells alcoholic and non-alcoholic beer under proprietary and licensed brands, as well as distributes Pernod Ricard products in non-supermarket retail stores.

Compañía Cervecerías Unidas Fundamentals Summary

How do Compañía Cervecerías Unidas's earnings and revenue compare to its market cap?
CCU fundamental statistics
Market Cap	CL$1.85t
Earnings (TTM)	CL$169.90b
Revenue (TTM)	CL$2.70t

10.9x

P/E Ratio

0.7x

P/S Ratio

Is CCU overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CCU income statement (TTM)
Revenue	CL$2.70t
Cost of Revenue	CL$1.47t
Gross Profit	CL$1.23t
Other Expenses	CL$1.06t
Earnings	CL$169.90b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	459.81
Gross Margin	45.58%
Net Profit Margin	6.28%
Debt/Equity Ratio	81.5%

How did CCU perform over the long term?

See historical performance and comparison

Dividends

8.0%

Current Dividend Yield

87%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CCU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CCU?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CCU. This is calculated by dividing CCU's market cap by their current preferred multiple.
What is CCU's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CL$1.85t

CCU key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1x
Enterprise Value/EBITDA	6.1x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does CCU's PE Ratio compare to its peers?

CCU PE Ratio vs Peers

The above table shows the PE ratio for CCU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	8.9x
ANDINA-B Embotelladora Andina	9.1x	10.2%	CL$1.4t
CONCHATORO Viña Concha y Toro	8.7x	9.6%	CL$882.3b
AQUACHILE Empresas AquaChile	13.4x	n/a	CL$985.0b
EMBONOR-A Coca-Cola Embonor	4.7x	n/a	CL$459.2b
CCU Compañía Cervecerías Unidas	10.9x	12.7%	CL$1.9t

Price-To-Earnings vs Peers: CCU is expensive based on its Price-To-Earnings Ratio (10.9x) compared to the peer average (8.9x).

Price to Earnings Ratio vs Industry

How does CCU's PE Ratio compare vs other companies in the Global Beverage Industry?

Price-To-Earnings vs Industry: CCU is expensive based on its Price-To-Earnings Ratio (10.9x) compared to the CL Beverage industry average (9.3x)

Price to Earnings Ratio vs Fair Ratio

What is CCU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CCU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.9x
Fair PE Ratio	13.9x

Price-To-Earnings vs Fair Ratio: CCU is good value based on its Price-To-Earnings Ratio (10.9x) compared to the estimated Fair Price-To-Earnings Ratio (13.9x).

Share Price vs Fair Value

What is the Fair Price of CCU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CCU (CLP5010) is trading below our estimate of fair value (CLP15972.28)

Significantly Below Fair Value: CCU is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Compañía Cervecerías Unidas forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CCU's forecast earnings growth (12.7% per year) is above the savings rate (7.7%).

Earnings vs Market: CCU's earnings (12.7% per year) are forecast to grow faster than the CL market (0.3% per year).

High Growth Earnings: CCU's earnings are forecast to grow, but not significantly.

Revenue vs Market: CCU's revenue (4.6% per year) is forecast to grow faster than the CL market (2.7% per year).

High Growth Revenue: CCU's revenue (4.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CCU's Return on Equity is forecast to be low in 3 years time (13.1%).

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Past Performance

How has Compañía Cervecerías Unidas performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CCU has high quality earnings.

Growing Profit Margin: CCU's current net profit margins (6.3%) are lower than last year (7.3%).

Past Earnings Growth Analysis

Earnings Trend: CCU's earnings have declined by 4.2% per year over the past 5 years.

Accelerating Growth: CCU's earnings growth over the past year (12.9%) exceeds its 5-year average (-4.2% per year).

Earnings vs Industry: CCU earnings growth over the past year (12.9%) underperformed the Beverage industry 20.1%.

Return on Equity

High ROE: CCU's Return on Equity (12.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Compañía Cervecerías Unidas's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CCU's short term assets (CLP1,577.6B) exceed its short term liabilities (CLP738.3B).

Long Term Liabilities: CCU's short term assets (CLP1,577.6B) exceed its long term liabilities (CLP1,248.5B).

Debt to Equity History and Analysis

Debt Level: CCU's net debt to equity ratio (37.3%) is considered satisfactory.

Reducing Debt: CCU's debt to equity ratio has increased from 16% to 81.5% over the past 5 years.

Debt Coverage: CCU's debt is not well covered by operating cash flow (11.5%).

Interest Coverage: CCU's interest payments on its debt are well covered by EBIT (9.8x coverage).

Balance Sheet

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Dividend

What is Compañía Cervecerías Unidas's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

7.98%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CCU's dividend (7.98%) is higher than the bottom 25% of dividend payers in the CL market (4.44%).

High Dividend: CCU's dividend (7.98%) is low compared to the top 25% of dividend payers in the CL market (13.88%).

Stability and Growth of Payments

Stable Dividend: CCU's dividend payments have been volatile in the past 10 years.

Growing Dividend: CCU's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (87%), CCU's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: CCU is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.4yrs

Average management tenure

CEO

Patricio Jottar Nasrallah (59 yo)

24.08yrs

Tenure

Mr. Patricio Jottar Nasrallah has been the Chief Executive Officer at Compania Cervecerias Unidas S.A. (CCU), a subsidiary of Quiñenco SA (formerly known as Quinenco SA) since July 1998. Mr. Nasrallah serv...

Leadership Team

Experienced Management: CCU's management team is seasoned and experienced (7.4 years average tenure).

Board Members

Experienced Board: CCU's board of directors are considered experienced (9.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/08 00:00
End of Day Share Price	2022/08/08 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31