Monster Beverage (MNST)

Key Statistics

EV/EBIT = 31.17x

ROE = 18.55%

Debt/Equity = 0%

FCF Yield = 1.29%

Dividend Yield = 0%

Market Capitalization = $52.81 billion

The Company

Monster Beverage is a California-based energy drink company that controls nearly 40% of the market. You have seen their products and know their logo, as they’re available at almost every convenience store and gas station throughout the United States.

The company was initially called Hansen’s Natural and sold natural juices in the 1930s. It was a good business but nothing spectacular. The company ran into financial difficulty, and by 1988 it went bankrupt. California CoPackers acquired it post-bankruptcy.

In 1992, new management entered the picture. Rodney Sacks and Hilton Schlosberg acquired the company for $14.5 million in 1992. Both were determined to turn the company’s fortunes around. They decided to focus on energy drinks.

The first energy drink, Hansen’s Energy, was a flop. By the late 1990s, it seemed as if they had missed the boat as Red Bull emerged as the dominant new energy drink.

Then, in 2002, they introduced Monster Energy. Monster was one of the first sizeable 16-ounce energy drinks available. The packaging featured a green monster claw logo upon a black can. It’s an aggressive logo with a bold motto: “unleash the monster within.” The design of the can appealed to a specific target demographic: young men.