Anheuser-Busch InBev (NYSE:BUD)
No discussion about best beer stocks is complete without mentioning Anheuser Busch. That’s because the company owns Bud Light, which consistently ranks as America’s top-selling beer brand. Further, with the consumer economy taking a hit during the pandemic, cheap alcoholic beverages have much more of an appeal these days.
Still, BUD stock is fundamentally on a recovery trek. Its quarter ended Dec. 31, 2020 wasn’t particularly great, with revenue slipping over 4% year-over-year to $12.8 billion. On the other hand, Anheuser Busch could be a contrarian play on the “vice” market.
Uproar over the brand’s partnerships in 2023 has pushed the stock’s value that much higher, leading a resurgence of business that was unforeseen.
Molson Coors Beverage (NYSE:TAP)
Molson Coors is the fifth-largest beer producer globally, boasting top-two positioning in the U.S., Canada, and many Central European markets. It brews and markets a slew of company-owned brands including Blue Moon, Coors, Miller, Vizzy, and Staropramen. It also sells various partner brands in certain locales such as Topo Chico (licensed from Coca-Cola), Amstel and Dos Equis in Canada (through an exclusive import/license arrangement with Heineken), and Corona in Central Europe (through an agreement with Anheuser-Busch InBev). The firm’s go-to-market approach differs by geography as well, primarily using independent distributors in the U.S., but deploying hybrid models in Canada and Europe.
Boston Beer Co (NYSE:SAM)
Boston Beer Company started with a family recipe for Louis Koch Lager in 1984. It brews more than 60 varieties of Samuel Adams beer including its flagship Boston Lager, seasonal brews, Brewmaster and the Barrel Room Collection.
Boston Beer Company has a market cap of $6.3 billion and trades over a million shares per day. It has an EPS of $8.62 and a P/E ratio of 60.35. The company generated total revenue of $1.3 billion in 2019.
Boston Beer Company stock rose by 26.9% in April 2020. Its newly-launched seltzer brand, Truly, contributed to that jump.
Heineken N.V. is a global producer and distributor of beer. It owns and operates several international brands such as Heineken, Amstel, Desperados, Sol, Tiger and Birra Moretti. Heineken is available in 190 countries across the world.
The beer stock has a market cap of $53 billion and has an EPS of $2.06. It has an annual dividend yield of $1.12 per share. Heineken has high liquidity and trades more than 942,000 shares per day. It generated revenue of $23 billion in 2019.
The popularity of beer is unsurpassed and companies that produce and distribute beer are on a market upswing — many beer stocks outperform earnings estimates.
Ready to tap into the market? Here’s a guide to investing in beer stocks to help you take advantage of their performance, especially given the expansive nature of many of these companies.
The Best Beer Stocks
Overview: Beer Stocks
Historic records of beer brewed from barley dates back to 6000 BCE. Beer was made in small quantities until the Industrial Revolution made it easier to harvest and ferment barley, wheat and hops in bulk.
The Boston Beer Company (SAM) is 1 of the oldest beer breweries in the U.S. and went public in 1995. It was among the earliest small breweries to attract new investors to this niche market.
Up until 2012, big breweries such as Anheuser-Busch InBev (NYSE: BUD) and Molson Coors Beverage Company (NYSE: TAP) produced 90% of the beer in the U.S. After home brewing became legal in all 50 states, 2,058 microbreweries popped up in 2019 alone.
The Brewer’s Association (BA) was set up in 2005 to promote and protect small and independent brewers. BA contains over 7,500 registered beer breweries, distributors and retailers. It also hosts the Great American Beer Festival every year to recognize the best new beverages entering the beer market. While your local microbrewery with a restaurant and extensive regional sales might not go public tomorrow, you never know when businesses will expand or be acquired by larger entities.
For example, local breweries might be acquired by public companies, making those stocks far more interesting to you in the long run. At the same time, you may want to consider investing in startups or small businesses as a way to diversify, along with these beer stocks.
Spirits with higher alcohol content like whiskey and wine have been giving beer companies a run for their money. The legalization of cannabis in the U.S. also comes into play. But despite competition, the beer market continues to grow because of its ties to party culture, sports leagues, etc. Moreover, many of the largest beer companies in America produce affordable products that will remain popular simply because of pricing.
Best Online Brokers for Beer Stock
You can browse through thousands of stocks within minutes using an online broker. These platforms let you trade with confidence and precision. Remember, however, that you must choose an online brokerage that suits your needs and fits into your budget—some are more expensive than others, offer more information, more technical data, etc.
Online brokers feature advanced tools to help you trade. For example, you can set customizable filters such as price range to instantly find the best stocks under $10 or stocks under $5. Value stocks can populate a portion of your portfolio, but you also want more “defensive” stocks that will provide the stockholder with dividends, perform well in a bull market and hold their stock price relatively well.
Take a look at these recommended online brokers to get started. When you choose the right broker for your situation, you’ll be much more comfortable with your investments and managing your portfolio.
Features to Look for in Beer Stock
- Earnings per share: The EPS of a company can help you determine its profitability. It’s calculated by dividing the net income of a company by its total number of outstanding shares. Investing in companies with a consistent history of beating EPS estimates can be a good strategy. For example, a growth stock has room to grow, and you can see that in the EPS.
- P/E ratio: You can assess whether a stock is undervalued or overpriced by its price-to-earnings (P/E) ratio. The lower the P/E ratio, the better its performance compared to its competitors. This is a good way to judge an income stock, and you can compare this ratio to the market capitalization to get a good idea of how the asset is performing.
- Yearly revenue: This is the total revenue generated by beer stocks, which can give you a fair measure of its performance in the market. Compare the revenue from previous years to get a better scale of a company’s growth and invest accordingly.
Tap into Beer Stocks
Many companies that brew beer also produce other alcoholic and non-alcoholic beverages, so beer stocks could bring you broader exposure to the food and beverage industry.
You may want to invest in these stocks to protect your portfolio during financial slumps, or you may buy into these companies because you see them growing and expanding quickly. Take the case of the Campari Group (DVDCF), a firm that has been around since the 1800s, and while Campari liqueur has been popular for some time, the firm has become one of the most profitable and popular in the world with its recent marketing push involving the Aperol aperitif.
Moreover, the same firm owns Grand Marnier, Wild Turkey Bouron and Skyy Vodka. Dividend payments could remain robust, but remember that any brand could falter given the right conditions. This is why you want to look at companies with noticeable capital appreciation, and measure stock performance often so that you’re not surprised when prices change.
Start with these recommended stocks to tap into the market today.
Frequently Asked Questions
Is investing in alcohol legal?
Yes, many alcohol producers have public stocks, and many private investors buy into breweries and distilleries across America.
Are all beer stocks American?
No. Many beer stocks represent American companies that represent many brands worldwide. Plus, the American beer industry was founded by Germans and primarily produces lagers. Moreover, many European companies that own a range of alcohol brands like Campari are available for trading.
Can you make money from beer stocks?
Beer stocks can help you make money as they grow, but you must monitor your portfolio and ensure that you buy and sell with your best interests in mind and never invest money you cannot afford to lose.