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Drink Up the Profits from the Beverage Sector

by
January 23, 2014 12:55 pm
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Drink Up the Profits from the Beverage Sector

For growth, value, and income investors, the beverage sector is swimming with appealing stocks ranging from prominent blue chips such as Coca-Cola (NYSE: KO) and Diageo (NYSE: DEO) to promising small caps such as Cott Corporation (NYSE: COT) and High Performance Beverages Company (OTC: TBEV).

Income investors should toast the dividend stream from Coca-Cola, Diageo, PepsiCo (NYSE: PEP), and Dr. Pepper Snapple Group (NYSE: DPS).

At present, the average dividend yield for a member of the Standard & Poor's 500 Index is under 2 percent. Dr Pepper Snapple Group has a dividend yield of over 3 percent. For Coca-Cola, it is 2.87 percent. Diageo has a dividend yield of 2.86 percent. It is 2.76 percent for Dr. Pepper Snapple Group.

For value investors, Cott Corporation is alluring.

It is the largest private label beverage maker in world. Cott's products are on the shelves of Wal-Mart (NYSE: WMT) and other major chains. Yet is is selling with a price-to-sales ratio of 0.35. That means that each dollar of sales is going for more than a two-thirds discount in the price of this small cap beverage producer.

For growth investors, High Performance Beverages Company is in the booming sports and energy drink. It is affiliated with Throwdown, which brings tremendous synergies in marketing and branding for the products.  That combined with the celebrity endorsements brings great growth potential for High Performance Beverages Company.

 

As detailed in previous articles on this site, stocks such as Coca-Cola and Diageo have roles in every portfolio due to the reliable returns and increasing dividend payments.  For growth and value in the beverage sector, investors should look to small caps like High Performance Beverages and Cott Corporation.  There is a stock for all investing styles to toast in the beverage sector.


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