(MONEY Magazine) – ANHEUSER-BUSCH (BUD) Price: $47.89 52-week range: $43 to $55 P/E: 19.3 Market cap: $41 billion Note: Data as of Feb. 21. Source: Thomson/Baseline.

Judging from the recent performance of Anheuser-Busch, you'd think the party days of the late-'90s bull market never ended. Through 2002, the maker of Budweiser posted 17 straight quarters of double-digit earnings growth. And since March 2000, when the tech sector imploded, Anheuser-Busch has returned a heady 69% vs. the S&P 500's 39% loss.

The fuel for such growth is, of course, Anheuser-Busch's U.S. beer business, which accounts for nearly 80% of its sales. But what has Wall Street buzzing is the company's growth potential abroad. Late last year, Anheuser-Busch agreed to increase its equity stake in Tsingtao Brewery, China's largest, from 4.5% to 27% over the next seven years. The aggressive move into China, the second-largest beer market (after the U.S.), buttresses an already extensive foreign portfolio. Anheuser-Busch owns 50% of Mexico's biggest brewery and has stakes in Chilean and Argentinean brewers, in addition to partnerships with beer makers in 16 other countries. "I don't think they've hit the ceiling by any stretch in America," says Morningstar analyst David Kathman, "but international growth is going to be huge for them."

The appeal of foreign markets is their rapid growth. By 2007, beer consumption in China is expected to be up 35% from 2001 levels, while the U.S. market will see a small decline, according to beverage research firm Canadean. Analysts at Credit Suisse First Boston project that operating profits from Anheuser-Busch's U.S. beer operation will rise about 7% annually through 2005; the international division is expected to see 10%-plus gains.

While Anheuser-Busch makes inroads abroad, business is strong at home, where it controls nearly 50% of the market. Such dominance, combined with a far-reaching distribution system and superior marketing, allows it to raise prices without hurting sales--a feat that rivals Coors and Miller haven't been able to match. Since 1995, gross profit margins at the company have steadily risen from 36% to 43%, and operating margins have spiked from 16% to 26%.

What could cause a hiccup in earnings? Consumers could turn to discount brands in a sinking economy. But most on Wall Street predict that the economy will slowly recover, making it even easier for Anheuser-Busch to hike prices and heavily promote new products like Michelob Ultra and its Bacardi Silver malt liquor beverage.

Most analysts expect the king of beers to continue to thrive. In each of the next two years, sales are expected to increase 4% and earnings are expected to grow about 12%. At a recent $47.89, Anheuser-Busch's stock is down from its 52-week high of $55 and trades at 19.3 times estimated 2003 earnings. That's above the S&P 500's P/E of 16.4 but is far below the company's five-year average of 24. Plus, the stock has a 1.6% dividend yield. "It's a very solid company to own, especially considering the stability it offers in a rough period," says Standard & Poor's analyst Howard Choe. --JEFF NASH