StockBeat: Heineken Boss Bows Out in Style - at a Good Moment
Investing.com -- Heineken’s veteran chief executive Jean-Francois van Boxmeer is bowing out with a flourish - and his successor is going to have to work hard to match it. That had seemed in doubt after Heineken’s last update, when it warned of all the usual headwinds to growth worldwide, but strong performances in Brazil and south-east Asia in the last three months of 2019 appear to have allayed those risks. The company both sold more beer and got a higher price for it, thanks to past spending on persuading customers that fermented barley water is actually a premium product. Organic sales volumes were up 3.1% on the year, while average selling prices were up 3.3%, not bad for an industry considered to be facing structural decline as consumer tastes evolve. Heineken’s numbers reinforce the positive mood music created last week by Carlsberg (CSE:CARLa), which raised its dividend sharply after reporting a 24% increase in profit for the year. But what’s true for Heineken’s premiumized beers is also true for its stock, which looks expensive at over 30 times trailing earnings and a dividend yield of less than 2%. Even after today’s hike in the dividend, the payout is still less than 40% of net earnings, which compares poorly to the 50% payout ratio at Carlsberg (CSE:CARLa). Nor was there any mention of future share buybacks in today’s release.