Generally, when people think of beer, a pub or bar comes into mind. Only the people selling it view it as something which helps them make money. But who knew, you can actually make money by investing in beer stocks. Now, just because you like beer doesn’t mean you should start investing in it blindly.
Presently, we’ve been observing two kinds of beer stocks; those that are performing comprehensively well and provide a handsome return to investors, while others aren’t doing so well. Nevertheless, in this article, I’ll be covering four different beer stocks that you should consider researching. Two of these stocks are dominating the market; the third is trying to enhance its performance. The final stock is working on reversing a history of downtrends, but if they’re successful, production will undoubtedly be better in the future.
Anheuser Busch InBev (NYSE: BUD)
The American based brewer has had to pave through some rough patches over the previous few years. Additionally, the market for beer stocks had been undergoing some significant changes. Like any smart player, Anheuser Bush InBev executed extensive market research, observed trends, and emerged as a leader in the business. To expand its reach, the company merged its operations with SABMiller to leave its competitors far behind.
The company is expecting its EPS to increase to $4.59 in 2019 as compared to last year’s $3.44. The total revenue of the brewing giant is also forecasted to increase by 1.33% to a mammoth $55.35 billion.
Constellations Brand (NYSE: STZ)
Not many people are familiar with the Constellations Brand, but they’re certainly familiar with their products; Corona and Modela. The latter happens to be the fastest-growing beer brand globally.
The company has been involved in expanding their product base and investment speculations as well. As of now, the company holds 38% in the Canadian cannabis producer Canopy Growth Corporation. Apart from this, Constellations Brand also produces spirits and wine to diversify its products and add value to its shareholders. The revenue for this year was $1.97 billion, and EPS was valued at $2.37, beating all forecasts and estimates.
Boston Beer (NYSE: SAM)
As compared to the previous two brands, Boston Beer is a much smaller player but slowly gaining more and more momentum in the market for beers. You might not have heard of the company itself but most probably saw their product, Sam Adams, in the market.
In light of past performance, the road has been shaky for Boston Beer, but it has begun to gain some stability in its operations. The stock managed to provide a return of 32% in the previous year. Moreover, the company is undergoing several investments that will most certainly enhance its profitability in the coming years. Boston Beer only holds a share of 2% in the beer market, so investors can expect substantial returns at the expense of high risk. The EPS for this year was valued at $1.84, while total revenue rose by 9.16% to $225 million.
Craft Beer Alliance (NASDAQ: BREW)
Craft beer has definitely grown in terms of popularity in the past few years. The Craft Beer Alliance has a wide range of products available for their buyers. Their most popular products include Red Hook, Wider Brothers, Kona, and Square Cider Mile Company. Out of all these brands, Kona is the most popular and preferred amongst drinkers.
Unfortunately, the market for craft beer has slowly been diminishing. Craft Beer Alliance has taken a substantial financial toll due to this reason. Consequently, its EPS was -$0.03 and revenue was only $49.33 million. Both of these figures deviated substantially from their estimates.
Despite being a lost cause for many investors, the company does possess the ability to grow and provide something valuable to its shareholders.
Final Verdict
If you’re looking for something stable that can provide you with a steady stream of returns, you should already be considering to invest in the first two stocks discussed above. However, if you’re a risk lover that likes being rewarded, the latter two can definitely grow and provide high returns. It is going to be your risk appetite which will decide your choice of the stocks after all!
