Beer sales have been relatively flat the past few years—but this brewer has seen rather frothy growth in both revenue and profits: Anheuser- Busch InBev (NYSE: BUD).

BUD is a far cry from the company that once touted “This Bud’s for you.” It’s now based in Belgium and run by Brazilian CEO Carlos Brito, the mastermind behind a series of mergers that led to a fivefold increase in revenue and operating profits. In 2004, Brazil’s AmBev (then the fifth-largest brewer) merged with Belgium’s Interbrew (third-largest) to create InBev. Then four years later, InBev bought Anheuser-Busch.

The result is the world’s largest brewing company, with close to $40 billion in annual revenue and some $12 billion in operating profit. BUD recently held 18 percent of the global beer market and was generating 30 percent of the industry’s operating profits. The next closest competitor is SABMiller (London: SAB), with around 10 percent of the global market.

By leveraging its beer distribution network—the world’s largest—BUD has increased its non-US sales by more than 45 percent since 2008. Earnings growth is being driven by three factors:

(1) Premium beers. Through aggressive advertising, the company is enticing more consumers to opt for higher-priced offerings, such as Stella Artois, Beck’s and Bud Platinum. The result is higher profit margins to offset flat sales, an effect demonstrated in the second quarter of fiscal 2012 (ended in July), when profit was up 35 percent, despite a slight decrease in revenue.

(2) Emerging markets. Virtually all of BUD’s sales-volume growth is coming from Latin America and Asia. North America, about a third of BUD’s business, has been relatively flat and Europe down significantly. The focus currently is expansion into China and northern Latin America.

Over the past two decades, per-capita beer consumption in China has soared fivefold, and is expected to climb another 33 percent in the coming decade, much of which will be in premium brands.

BUD already claims 42 percent of Chinese premium- beer sales and is focusing on expanding inland throughout the country, via existing brands as well as mergers and acquisitions. Since the country’s beer market is currently comprised of a patchwork of local and regional brands, there isn’t a shortage of opportunities.

(3) Acquisitions. The global beer companies control only about half the world market; the rest is fragmented among many smaller producers. And BUD’s CEO is skilled at putting together deals, and then maximizing the resulting cost savings and marketing synergies. Recently, the company agreed to buy 50 percent of Mexico’s Grupo Modelo, in addition to the 50 percent it already owns. This will expand BUD’s cooler to include top brands such as Corona, the largest imported beer in the US.

When that occurs, BUD’s annual revenue is expected to rise by some $17 billion annually. This will also expand the company’s billion-dollar-a-year brands to a total of 17 (from the current 14).

Not only does BUD have a credible growth strategy, it’s extremely shareholder friendly. Management is aiming for a stock-dividend yield of 3 percent to 4 percent (currently at 2 percent). And it’s been putting its money where its mouth is, boosting the payout nearly 140 percent in the past few years. Currently throwing off free cash flow of about $9.5 billion annually, BUD could fairly easily double the dividend while maintaining a payout ratio well below 50 percent.