Investing
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Top 10 Alcohol Stocks to Invest In 2020

By
Thomas M.
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September 14, 2020

Want to diversify your portfolio with alcohol stocks?


Stocks, bonds, an ETF, or a mutual fund would usually be the first options you hear of when it comes to alcohol investment.


But is that the best way to invest in spirits and wine?

And will it guarantee you consistent growth even during economic downturns?


Investing in alcohol stocks may not be as straightforward as grabbing your pint of favorite beer!


Not to worry. In this article, we’ll show you 10 of the best performing alcohol and wine stocks you can invest in. You’ll also discover a much smarter and hassle-free way to invest in the attractive wine market!


(Meanwhile, if you want to know how to invest in fine wines like Dom Perignon, check this post out. And, read this post if you’re curious to know how to store these precious bottles.)

This article contains:

(Click on the links below to go to a specific section)

1. Boston Beer

2. Craft Brew Alliance

3. Willamette Valley Vineyard

4. Constellation Brands

5. Anheuser-Busch InBev

6. Diageo

7. Brown-Forman

8. Molson Coors Beverage

9. Corby Spirit & Wine

10. National Beverage Corp

What are Alcohol Stocks and Why Should You Invest in Them?

Stocks of companies that make and distribute alcoholic beverages like beer, wine, and liquor are alcohol stocks.


They fall into a category called “sin stocks” (similar to a vice fund), which also includes marijuana stocks, and stocks of tobacco, gambling, and weapons manufacturers.


Why should you invest in alcohol stocks?


Most liquor or alcoholic beverages companies have strong brands and high pricing power. They have a global distribution network and a higher cash flow, allowing them to pay a higher dividend to stockholders.


(But, are they recession-resistant? Well, almost. More on that later!)

Investing in beer stocks

The beer industry is an attractive one for a long-term investor. Beer manufacturers manage to perform well consistently, ensuring a consistent dividend to shareholders.


Also, there’s been a major shift in consumer preferences. They’re increasingly picking beer stock of companies like Boston Beer Company that have craft beer, seltzers, and hard ciders in their portfolio - over the mass market beer makers.

Investing in stocks of other spirits like whiskey

Most liquor or alcohol industry stocks of whiskey, rum, tequila, and other spirits (Globus Spirits, for example) are steady dividend stocks.

Investing in wine stocks

Wine has outperformed the S&P 500 by 1000% for the last 20+ years, including during downturns! That makes wine an attractive market for long-term investments.


(If you want to know more on investing in wine, read all about it here: Investing in Wine, and How to Build a Wine Collection.)


What are the best alcohol and wine stock picks that you could invest in now?



Top 10 Alcohol Stocks to Invest in 2020

Here’s a handpicked list of alcoholic beverages stocks that could give you attractive returns:

1. Boston Beer (NYSE: SAM)

Boston Beer is headquartered in Boston, Massachusetts, and was founded by James Koch in 1984.


Boston Beer specializes in craft beer, hard cider, and hard seltzer. It’s main alcoholic beverages brands are Samuel Adams, Twisted Tea, Angry Orchard, and Truly Hard Seltzer.


The recent consumer preference for craft beer and higher-end alcohol and wine has benefited companies like Boston Beer Company driving up their stock performance.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 75.9
  • Earnings per share: $9.17
  • Dividend yield: Not available
  • Market cap: $7.9 billion


Company Fundamentals (2019-’20)


  • Revenue: $1.25 billion
  • Operating Margin: 6.9%
  • Debt to equity ratio: 0.13

2. Craft Brew Alliance (NASDAQ: BREW)

Craft Brew Alliance is a Portland-based beer company that manufactures beer and ciders. Its brands include Kona, Redhook, Cisco, pH Experiment, Widmer Brothers, Wynwood Brewing, Omission, Square Mile Cider, and the Appalachian Mountain Brewery.


This alcoholic beverages company is set to be fully acquired by Anheuser-Busch InBev in 2020. And, all these alcoholic beverages brands will merge with the Brewers Collective, Anheuser’s craft division, whose brands include Goose Island, Elysian, and Wicked Weed.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): Not available
  • Earnings per share: $0.55
  • Dividend yield: Not available
  • Market cap: $276.5 million


Company Fundamentals (2019-’20)


  • Revenue: $204.6 million
  • Operating Margin: -3.27%
  • Debt to equity ratio: 0.56

3. Willamette Valley Vineyard (NASDAQ: WVVI)

Jim Bernau’s Willamette Valley Vineyards in Oregon grows and makes wines from Pinot noir, Dijon clone Chardonnay, Pinot gris, and Riesling grapes.


Bernau and his company have been pioneers in Oregon winemaking. Notably, the winery is the first crowdfunded one in the United States.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 17
  • Earnings per share: $0.37
  • Dividend yield: Not available
  • Market cap: $31.6 million


Company Fundamentals (2019-’20)


  • Revenue: $26.3 million
  • Operating Margin: 16.2%
  • Debt to equity ratio: 0.15



4. Constellation Brands (NYSE: STZ)

Constellation Brands, New York is a producer of beer, wine, and spirits.


This beer company has more than 100 brands in its portfolio, including wine brands like Robert Mondavi, Opus One, Wild Horse Winery, Ravenswood Winery, and Clos du Bois.


Constellation Brands, Inc also owns beer brands like Corona, Modelo Especial, and Pacífico, and other popular brands in the alcoholic beverage industry, including Svedka Vodka, Casa Noble Tequila, and High West Whiskey. It also has a 38.6% stake in cannabis company Canopy Growth.


Revenue has increased by 21% since 2016, and operating free cash flow is up 138% in 2019.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 1003.7
  • Earnings per share: $9.12
  • Dividend yield: 1.7%
  • Market cap: $34.5 billion


Company Fundamentals (2019-’20)


  • Revenue: $9.1 billion
  • Operating Margin: 20.04%
  • Debt to equity ratio: 1.02



5. Anheuser-Busch InBev (NYSE: BUD)

Anheuser-Busch InBev (AB InBev), is a beer and soft-drink company headquartered in Leuven, Belgium. It owns over 400 beer brands and others, including Budweiser, Corona, Stella Artois, Hoegaarden, and Leffe.


The company's non-alcoholic drinks business consists of its own production and agreements with PepsiCo and the operations of merged entity Ambev SA (ABEV). Pepsi, Gatorade, and 7UP are the brands that are distributed under these agreements.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 14.6
  • Earnings per share: $4.08
  • Dividend yield: 2.62%
  • Market cap: $92.5 billion


Company Fundamentals (2019-’20)


  • Revenue: $52.3 billion
  • Operating Margin: 29.57%
  • Debt to equity ratio: 1.33



6. Diageo (NYSE: DEO)

Diageo, headquartered in London, is the world’s second-largest distiller and the largest liquor distributor. The company operates in over 180 countries with production in more than 140 sites globally.


The notable brands of Diageo include Johnnie Walker, Crown Royal, J&B, Smirnoff, Baileys, Ketel One, and Captain Morgan. The food operations, including Pilsbury and Burger King were sold off by Diageo PLC in 2000.


The broad Diageo portfolio of beer and spirits appeals to both emerging and developing markets.


Diageo has shown consistent revenue growth, a growing stock price, and a 20-year dividend (until the coronavirus induced downturn). In 2019, it had a net income or net profit of $4 billion.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 21.83
  • Earnings per share: $x
  • Dividend yield: 2.42%
  • Market cap: $83.6 billion


Company Fundamentals (2019-’20)


  • Revenue: $16.8 billion
  • Operating Margin: 31.3%
  • Debt to equity ratio: 1.14

7. Brown-Forman (NYSE: BF.B, BF.A)

Brown-Forman is a spirits and wine company with a presence in more than 170 countries. It has a large product portfolio focused on whiskey, vodka, and tequila.


It’s famous brands include Jack Daniels (flagship brand), Herradura, Woodford Reserve, El Jimador, and Finlandia.


The Brown-Forman stock has an impressive 30-year track record of dividend growth - thanks to the strong brand value and resiliency to recessions.


As compared to slower growing competitors like Compania Cervecerias Unidas (CCU), you can expect at least 7% earnings growth over the next few years.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 38.98 (well above a fair value estimate of around 22)
  • Earnings per share: $1.75
  • Dividend yield: 1.04%
  • Market cap: $31.19 billion


Company Fundamentals (2019-’20)


  • Revenue: $3.4 billion
  • Operating Margin: 30.7%
  • Debt to equity ratio: 1.32

8. Molson Coors Beverage (NYSE: TAP)

Chicago-based Molson Coors Beverage Company was formed in 2005 by the merger of Molson of Canada (founded in 1786), and Coors of the US (founded in 1873).


It is the second-largest brewer by alcoholic beverage sales volume in the United States, and the world's fifth-largest.


Molson Coors owns several brands, including Coors Light, Molson Canadian, Coors Banquet, Carling, Hop Valley, Blue Moon, and Crispin Cider.


It has a relatively small group of craft beers in its portfolio as compared to smaller breweries in the United States. However, with its top brands, Molson Coors is expected to maintain strong pricing power that will continue to help its margin growth over time.


Historical Stock Price Performance chart


As you can see, the stock price has been falling, but the P/E ratio is far lower than the brands we mentioned earlier. The dividend yield is also higher, so this is a less expensive pick.


Source: Google Finance


  • P/E ratio (TTM): 11.7
  • Earnings per share: $1.12
  • Dividend yield: 4.8%
  • Market cap: $7.8 billion


Company Fundamentals (2019-’20)


  • Revenue: $2.1 billion
  • Operating Margin: 13.5%
  • Debt to equity ratio: 64.2

9. Corby Spirit and Wine (Toronto Stock Exchange TSX: CSW.A, CSW.B)

Corby Spirit and Wine is an alcoholic beverages company founded in 1859 in Ontario, Canada. It is 46% owned by Pernod Ricard.


Corby's portfolio includes JP Wiser's Whisky, Polar Ice vodka, Lamb's rum, and Guinness liqueurs. The company also represents brands like ABSOLUT vodka, Chivas Regal, Jameson Irish Whiskey, Glenlivet distillery and Ballantine's Scotch whiskies, Malibu rum, Kahlúa liqueur, Jacob's Creek, Stoneleigh, Campo Viejo, and Wyndham Estate wines.


Historical Stock Price Performance chart


Like Molson above, this has also been falling, but the high dividend yield and low P/E ratio make it a stock worth exploring.


Source: Google Finance


  • P/E ratio (TTM): 17.5
  • Earnings per share: $0.95
  • Dividend yield: 5.3%
  • Market cap: $355 million


Company Fundamentals (2019-’20)


  • Revenue: $116 million
  • Operating Margin: 23.3%
  • Debt to equity ratio: 3.11

10. Andrew Peller (Toronto Stock Exchange: ADW.B)

Andrew Peller is one of Canada’s leading wine and craft spirits producers. It owns brands such as Trius, Hillebrand, Peller Estates, Thirty Bench, Copper Moon, Calona Vineyards Artist Series VQA wines, Sandhill, and Red Rooster.


Apart from these premium brands, it also produces lower priced wine based liqueurs, varietal offerings, craft ciders, and craft spirits like Schloss Laderheim, Hochtaler, Domaine D'Or, and Royal and Sommet.


Historical Stock Price Performance chart


Source: Google Finance


  • P/E ratio (TTM): 17.9
  • Earnings per share: $0.55
  • Dividend yield: 2.6%
  • Market cap: $429.4 million


Company Fundamentals (2019-’20)


  • Revenue: $382.3 million
  • Operating Margin: 11.9%
  • Debt to equity ratio: 0.67


Now, here’s something noteworthy:

According to data from market research firm Nielsen, the COVID-19 pandemic has caused a short term spike in beer sales and alcohol sales in the US.


This is because consumers rushed to the nearest liquor store to stock up on alcohol before the shelter-in-place orders.


However, widespread job losses, decreased travel, and on-premise closures of bars and restaurants are bound to have a negative long term impact on alcohol sales.


Apart from that, there are some negatives to parking your money in alcohol stocks.

The Downside of Investing in Alcohol Stocks

Here are the four main reasons why you shouldn’t bank only on alcohol stocks:

1. Some alcohol companies don’t perform well during recession

Despite being held as recession-resistant, some alcohol companies have underperformed during downturns.


For example, Diageo and Constellation Brands performed relatively poorly during the 2008 financial crisis.


During this period, wine stock and other beverage stocks fell to multi-year low valuation. Distillers and wineries saw the largest drop in P/E ratios, followed by soft drinks and brewers.

2. Volatility even during healthy economic climates

When the markets are volatile during normal economic conditions, alcohol stock market prices fluctuate quite a bit. In 2015, the Diageo liquor stock depreciated 11.63%, while Constellation Brands share price appreciated 54.93%.

3. Takes a lot of time and effort

You’ll have to put in a lot of time and effort to research alcohol companies and stock market trends to identify the best ones for your portfolio.

4. Brokerage

To save time and effort, you may entrust brokerage firms with your alcohol stock investments. But, you’ll have to shell out high commissions each time you buy or sell a stock, apart from currency conversion and account maintenance charges.


Don’t worry. There’s a much easier way to invest in alcohol, especially wine.


How about investing in wine bottles?


Investing in wine bottles has a few key advantages over investing in alcohol stocks.

  1. You can pursue a specific wine from a particular year that you believe will going to go up in price. Buying an alcohol stock forces you to bet on the company amongst a portfolio of different types of alcohol.


  1. In times of recession, the consumption of alcohol rises. This is a big advantage that increases the demand for wine bottles.


But, that advantage may not translate when you are buying the stock of a large conglomerate with tens of thousands of employees on payroll and many other complicated logistical operations.


  1. Finally, if the price of a wine bottle goes down, you can always drink it and enjoy it. You cannot do that with a stock.


So, how do you invest in wine bottles?


You could have a trusted wine investment company like Vinovest buy your Cabernet Sauvignon or Pinot Noir bottles, store them under perfect conditions, and even sell them for you!


Let’s see how this works.

How to Invest in Fine Wines Through Vinovest  - A Wine Investment App


Vinovest is a wine investment company that buys, authenticates, stores, and sells investment-grade wines for you.


You can even have your bottles delivered to your doorstep for drinking, or to buyers once you sell them.

How does it work?

Simply follow these four steps:


  1. Sign up on the Vinovest website with just your name, email, and password.
  2. Answer a few questions for the wine experts at Vinovest to assess your investment style and risk appetite.
  3. Add funds to your account.
  4. Track your fine wine portfolio online.

Benefits of buying wines through Vinovest

Here’s why it’s a great idea to buy, store, and sell your wine through Vinovest.


Easy buying and selling of wines

Vinovest makes it easy to buy and sell wines with its Artificial Intelligence (AI)-based online platform.


Best prices

Vinovest sources wines directly from winemakers, global wine exchanges, and wine merchants. This means you buy wine bottles at the best possible wholesale prices.


Provenance and authenticity

Vinovest authenticates each wine bottle and traces its provenance before you buy one.


Curated portfolio

A team of master sommeliers and data scientists carefully curates your portfolio using proprietary financial models that analyze your investment preferences, and historical market data.


Optimal storage

Your wine bottles will be stored safely in bonded warehouses, under ideal conditions of light, humidity, vibration, and temperature.


Insurance and security

Your bottles will be monitored constantly by security cameras. Rest assured, there are power back-ups if the primary method fails to maintain the climate-controlled conditions. There’s also a comprehensive insurance policy that will protect your wine cellar at all times.


Low overall costs

Besides the funds you add to your account, all you need to pay is a 2.85% annual fee (2.5% for a portfolio over $50,000). This covers wine buying, authentication, storage, a full insurance policy at market value, portfolio management, and selling. You’ll also enjoy significant tax advantages because bonded warehouses don’t charge VAT and excise duty.


Easy delivery of wines

You can get your favorite Merlots, and Sauvignon Blancs delivered to your home if you wish to uncork them for a special event. Or, you can have them delivered directly from the warehouse to your buyers once they’re sold.


Ownership

But, do you own the wines you buy? Yes - and, that’s the coolest part!

To conclude...

Alcohol and wine stocks may seem like the most straightforward way to invest in spirits and wine.


But, the fortunes could swing either way during a downturn. And, the continuous process of choosing stocks and selling them at the right time will take up significant time, effort, and money.  


Instead, your smartest and easiest option is to invest in the high-growth wine market by buying, storing, and selling wine bottles through Vinovest.


So sign up right away and get started with your wine portfolio!

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