PSG Asset Management are currently punting brewing group Heineken as an investment opportunity for their clients.
In a nutshell, the PSG view on why investors should look at Heineken:
Weak economic conditions have presented investors with a great buying opportunity as the market in our view has treated Heineken as a European company, tainted by the well-known problems the region faces. However, Heineken, owner of the globe’s best premium beer brand, in fact has 51% of sales emanating from emerging markets, with enviable positions in Africa, Asia and Mexico.
On a price to earnings multiple of around 17 and a dividend yield of less than 2, Finweek isn’t 100% convinced that we would be a buyer here. However in the PSG presentation, there are two fascinating graphs around how the African beer market is broken up and we thought they were worth sharing:
The first graph is the key African beer markets with a volume share breakdown:
The second graph is one from 2010 and shows Gross Domestic Product (GDP) vs beer consumption per capita in Africa. It is a little bit out of date but still a fascinating image: