One of the main reasons why you should be investing in beverage stocks is because everyone needs to drink and it keeps it a very profitable and stable business. Beverage companies grow quite consistently and are cheaper to afford than most of the other stocks. Another plus point is that that they pay dividends and many have paid dividends even during the pandemic. And the pandemic has forced people to stay at home which has turned even more people towards snacking and drinking. Some of the beverage stocks to invest in right now are:
Constellation Brands, Inc. (NYSE: STZ)
Constellation Brands (STZ) is a leading beverage alcohol company whichproduces and imports different of wines and beers in Italy, North America, Mexico, and New Zealand. It has several popular brand names such as Svedka, Pacifico, Modavi, Victoria, and Corona Light. The company has managed to keeps its steady dividend and is now spreading into other ventures such as investing in Canopy Growth, which is Canada’s biggest cannabis producer. It currently has a 37 per cent stake in Canopy Growth.
During the third quarter, STZ’ sales grew 1.4 per cent, year over year, to $2 billion which exceeds the expectations of analysts by $0.05 billion. Constellation Brand’s EPS grew 9.7 per cent to $2.14 from the analysts’ expectations of just $1.83. And while its investment in Canopy Growth raises concerns, it is a profitable investment over all.
Monster Beverage Corp (NASDAQ: MNST)
Monster Beverage(MNST) is a popular caffeinated energy drink and has been steadfast since the fifteen years it first caught the attention of Wall Street. Its trading was up by 14 per cent this year which is 49 per cent rebound from the lows in march. In terms of cash and short-term investments, Monster has $935 million and has not been in debt since 2011. But like all other companies, particularly those which earned from people coming and going to gas stations and convenience stores, MNST also suffered during the pandemic lockdown. 72 per cent of Monster’s total sales in 2019’s fourth quarter came from convenience store revenues.
The long-term growth drivers for Monster are healthy and investors are aware that short terms changes in the market are often temporary. With the world reopening next year, Monster will once again see a profit in stocks and it is projected that its stocks will continue to rise for many coming years.
Coca-Cola Co (NYSE: KO)
Coca-Cola (KO) is the biggest soda company in the entire world and has a 50 per cent share in the global carbonated soft drink market and while it may not have the snack food exposure of Frito-Lay and PepsiCo, it is still a strong competitor on stocks. It was hard year for Coca-Cola because of the lockdown and its second quarter earnings per share were expected to be lesser by 35 per cent.
But analysts expect that KO will emerge stronger from the entire ordeal as depicted by its strong balance sheet and already it has been paying a 3.5 per cent dividend. It is a leading company in the non-alcoholic drinks market and has been keeping up since decades. It is even expected that its compounded annual growth rate over the next five years will be 6.8 per cent and in terms of profit margins it is still doing better than PepsiCo. Coca-Cola’s net revenues declined by 9 per cent in the third quarter to $8.7 billion. In terms of operating margin, it remained close to the prior year at 26.6 per cent and comparable operating margin was 30.4 per cent in comparison to last year’s 28.1 per cent.