Samuel Adams Financials

Company Overview for Long-Term Growth Investors

The Boston Beer Company (SAM) is a high quality company that could be a potential long-term, buy-and-hold investment candidate for a diversified stock portfolio. The Boston Beer Company holds its own distinction as the largest microbrewer in the U.S. In addition, the company is well diversified by having a wide range of flavored malt beverages, seasonal beers, and ciders. The Boston Beer Company is also a member of the Consumer Defensive sector and the Beverages – Brewers industry ("Stockcentral :: Industry averages," 2012)

Some of the industries within this sector can be impacted by the economy since the overall sector depends on consumer spending.

Although it is expected that consumers would purchase less beer due to the recent economic downturns, Figure 1 shows that Boston Beer’s 5 year average revenue growth is in line with all the S&P 500 sectors and in fact, its earnings per share average growth (EPS) is higher than all the other S&P 500 sectors ("Stockcentral :: Industry averages," 2012). Moreover, as compared to all other companies in the Beverage – Brewery industry, Figure 2 illustrates that The Boston Beer Company has a higher EPS and return on investment (ROE), in addition to no debt. However, its price to earnings ratio (P/E) and revenue are below the industry ("Stockcentral :: Industry averages," 2012).

The key ratios in both figures are good indicators that The Boston Beer Company is an overall great long-term investment for a growth investor. Additionally, sticking to the company’s core focus to innovate and expand on its artisan beers will certainly raise demand for its niche beers. This will allow The Boston Beer Company to continue brewing up profits for years to come, yielding a positive return for long-term growth investors.

Figure 2. 5 Year Average Sector Performance. ("Stockcentral :: Industry averages," 2012).

Figure 2. 5 Year Average Sector Performance. ("Stockcentral ::...