The 9 Top Beverage Stocks Now, Ranked In Order - Sure Dividend

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The 9 Top Beverage Stocks Now, Ranked In Order


Updated on October 13th, 2021 by Bob Ciura

This article examines the investment prospects of 9 of the top beverage stocks in detail. The companies analyzed sell a mix of alcoholic and non-alcoholic beverages.

We have compiled a list of over 20 stocks that manufacture beverages. The list was derived from the holdings of two of the top beverage industry exchange-traded funds:

  1. First Trust Consumer Staples Fund (FXG)
  2. Invesco Dynamic Food & Beverage ETF (PBJ)

You can download the full spreadsheet of all beverage stocks (with important financial metrics) by clicking on the link below:

 

In addition to the Excel spreadsheet above, this article covers our top 9 beverage stocks today, as ranked using expected total returns from the Sure Analysis Research Database.

We rank these 9 companies by our expected total annual return estimate over the next five years, which is a combination of future earnings-per-share growth, current dividend yield, and the impact of multiple expansion or contraction.

Table of Contents

Top Beverage Stock #9: Constellation Brands (STZ)

Founded in the mid-1940s, Constellation Brands is a producer and distributor of beer, wine and spirts. The company’s beer brands include Corona, Modelo Especial, and Pacifico. Constellation Brands also has a robust craft beer portfolio and includes such brands as Ballast Point and Funky Buddha Brewery. Constellation Brands is the third largest beer company in the U.S.

Related: The 6 Best Alcohol Stocks Now, Ranked For Future Returns

In total, we expect that Constellation Brands can offer a total annual return of 3.0% over the next five years. We forecast that earnings growth (5%) and dividend yield (1.4%) will be offset by a declining P/E multiple.

Click here to download our most recent Sure Analysis report on Constellation Brands (preview of page 1 of 3 shown below):


Top Beverage Stock #8: PepsiCo Inc. (PEP)

PepsiCo is a global food and beverage company that generates $75 billion in annual sales. The company’s products include Pepsi, Mountain Dew, FritoLay chips, Gatorade, Tropicana orange juice and Quaker foods. The company has 23 $1 billion brands in its portfolio. PepsiCo was founded in 1898 and currently employs 291,000 people around the world.

PepsiCo has increased its dividend each year for over 40 years in a row, qualifying the stock on the exclusive Dividend Aristocrats list.

We expect that earnings growth (5.5%), dividend yield (2.7%) and a declining P/E multiple will lead to total annual returns of 3.6% over the next five years for PepsiCo stock.

Click here to download our most recent Sure Analysis report on PepsiCo (preview of page 1 of 3 shown below):

Top Beverage Stock #7: J.M. Smucker (SJM)

J.M. Smucker began as a small cider mill in Orrville, Ohio in 1897. Since this time, J.M. Smucker has grown into a worldwide leader of packaged food and beverage products. Some of the company’s brands include Smucker’s, Jif, Crisco, Milk Bone and Folgers.

Source: Investor Presentation

Overall, J.M. Smucker is expected to return 5.9% annually, due to a combination of earnings growth (5%) and dividend yield (3.2%) partially offset by a declining P/E multiple.

Click here to download our most recent Sure Analysis report on J.M. Smucker (preview of page 1 of 3 shown below):

Top Beverage Stock #6: The Coca-Cola Company (KO)

CocaCola is the world’s largest beverage company, as it owns or licenses more than 500 unique nonalcoholic brands. Since the company’s founding in 1886, it has spread to more than 200 countries worldwide. Its brands account for about 2 billion servings of beverages worldwide every day, producing more than $37 billion in annual revenue.

The company also has a staggering 59year dividend increase streak, making it a Dividend King.

Click here to download our most recent Sure Analysis report on Coca-Cola (preview of page 1 of 3 shown below):

Top Beverage Stock #5: Anheuser-Busch InBev (BUD)

AnheuserBusch InBev SA/NV is the largest brewer in the world. The company was formed in 2008 by the merger of InBev and AnheuserBusch and is majority owned by 3G Capital. The company acquired SABMiller in 2016, sold Carleton (Australian unit) in 2019, and acquired Craft Brew Alliance in 2020. AB InBev owns about 61.8% of Ambev S.A.

Today, AB InBev produces, markets, and sells over 500 different beer brands around the world. The company has five of the top 10 beer brands and 18 brands with over $1B in sales. Major global brands include Budweiser, Stella Artois, and Corona. Large regional brands include Aguila, Hoegaarden, Skol, and Brahma

Click here to download our most recent Sure Analysis report on Anheuser-Busch InBev (BUD) (preview of page 1 of 3 shown below):

Top Beverage Stock #4: Ambev SA (ABEV)

Ambev S.A. is a producer and distributor of alcoholic beverages, primarily beer. Headquartered in Sao Paulo, Brazil, Ambev is the successor of two of the oldest breweries in Brazil. The company’s brands include Skol, Labatt, Brahma, Antarctica and Presidente. Ambev merged with Anheuser-Busch (BUD) in 2008.

Click here to download our most recent Sure Analysis report on Ambev SA (preview of page 1 of 3 shown below):

Top Beverage Stock #3: Unilever plc (UL)

Unilever is one of the largest consumer goods companies in the world, producing and marketing ~400 brands in nearly 200 countries. Wellknown brands include Ben & Jerry’s, Qtips, Suave, Vaseline, Axe, Dove, Hellmann’s, Knorr and many more. Its products are used by more than 2 billion people every day.

Source: Investor Presentation

In late July, Unilever reported (7/22/21) financial results for the second quarter of fiscal year 2021. The company grew its underlying sales 5.4% over last year’s quarter, with 4.0% volume growth and 1.3% price hikes.

We expect annual returns of 9.3% through 2026, due to 5% expected EPS growth, the ~3.5% dividend yield, and a small boost from a rising P/E multiple.

Click here to download our most recent Sure Analysis report on Unilever plc (preview of page 1 of 3 shown below):

Top Beverage Stock #2: Keurig Dr. Pepper (KDP)

Keurig Dr. Pepper (KDP) is the result of a ~$20B merger between Dr. Pepper Snapple (DPS) and Keurig Green Mountain completed in mid2018. The new company started trading on July 10, 2018. KDP is now the third largest nonalcoholic beverage company in terms of revenue in the U.S. behind CocaCola (KO) and Pepsi (PEP).

The company has generated strong growth in the past several years.

Source: Investor Presentation

KDP reports four business segments: Coffee Systems, Packaged Beverages, Beverage Concentrates and Latin America Beverages. Major brands include Core, Dr. Pepper, Sunkist, Canada Dry, Bai, 7UP, Snapple, and Keurig. KDP had net sales of about $11.62B in fiscal 2020.

We expect annual returns of nearly 10% per year, due mostly to 10% expected EPS growth. We view the stock as overvalued, with the negative return from a declining P/E multiple essentially offsetting the current dividend yield.

Click here to download our most recent Sure Analysis report on Keurig Dr. Pepper (preview of page 1 of 3 shown below):

Top Beverage Stock #1: Molson Coors (TAP)

Molson Coors was founded in 1873 and has grown into one of the largest U.S. brewers, offering a wide variety of popular brands such as Coors Light, Coors Banquet, Molson Canadian, Crispin Cider and Miller Lite through a joint venture called MillerCoors.

Click here to download our most recent Sure Analysis report on Molson Coors (preview of page 1 of 3 shown below):

Final Thoughts

Beverage stocks offer something different for investors, ranging from slower-growth high-yield stocks, to stocks with lower dividend yields but better growth prospects. Investors have multiple options when it comes to investing in non-alcoholic beverages, alcoholic beverages, wine and spirits.

Of the 9 beverage stocks on this list, we rate Molson Coors as the top-ranked stock.

Further Reading: 7 Best Food Stocks Now, Ranked In Order

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