Five alcohol stocks to explore when market gets choppy

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Five alcohol stocks to explore when market gets choppy

 Five alcohol stocks to explore when market gets choppy
Image source: Ievgenii Meyer, Shutterstock

Highlights

  • MGP Ingredients, Inc. (NASDAQ: MGPI) has a P/E ratio of 12.27, and a dividend yield of 8.46%.
  • Lvmh Moet Hennessy Vuitton SE ADR (OTC: LVMUY) has a P/E ratio of 38.54, and a dividend yield of 1.00%.
  • Molson Coors Beverage Company's (NYSE: TAP) current dividend yield is 2.75%, and the annualized dividend is US$1.36. 

The alcohol-and-beer industry is not the fastest growing sector, but it has a steady flow of customers. The pandemic hasn’t drastically affected the consumer staple sector. When other industries struggled, the alcohol-and-beer industry thrived even during lockdowns.

Here we discuss five such companies that might be worth exploring.

MGP Ingredients, Inc. (NASDAQ: MGPI)

MGP Ingredients Inc supplies premium distilled spirits, starch food ingredients, and specialty wheat protein. It also produces industrial alcohol for food and non-food applications.

Its two operating segments are distillery products and ingredient solutions. Most of its revenue comes from the distillery products segment.

The company is based in Atchison, Kansas. 

For the quarter ended September 30, 2021, it booked net sales of US$177 million compared to US$103 million for the same period in 2020. The net income was US$23.9 million or US$1.08 per share diluted compared to US$10.4 million or US$0.61 per share diluted a year ago.

The company's market capitalization is US$1.8 billion. Its P/E ratio is 23.35, and the forward P/E one year is 20.42. The dividend yield is 0.56%, with an annualized dividend of US$0.48.

The stock traded in the range of US$89.50 to US$48.05 in the last 52 weeks and closed at US$82.69 on Jan 5.

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Five alcohol stocks to explore when market gets choppy

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Compania Cervecerias Unidas, S.A. (NYSE: CCU)

The Santiago, Chile-based company is one of the leading beer producers. Compania Cervecerias Unidas, also known as United Breweries, produces wines, spirits, and nonalcoholic beverages.

Most of its revenue comes from Chile.

For the quarter ended September 30, 2021, it earned CLP$622 billion (Chilean Pesos) (or around US$751 million) compared to CLP$428 billion (Chilean Pesos) (or around US$516 million) in the same period in 2020. Its net income was CLP$42.16 billion compared to CLP$12.13 billion in the September quarter of 2020.

Compania Cervecerias Unidas has a market capitalization of US$2.99 billion. Its P/E ratio is 12.27, and the forward P/E one year is 11.22.

The dividend yield is 8.46%, with an annualized dividend of US$1.357. The stock moved in the range of US$21.82 to US$15.03 in one year. The CCU stock closed at US$16.05 on January 6.

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Lvmh Moet Hennessy Vuitton SE ADR (OTC: LVMUY)

The Paris, France-based company is a global producer and distributor of luxury goods. Its segments include fashion and leather goods, wines and spirits, perfumes and cosmetics, watches and jewelry, selective retailing, and others. 

Its popular brands are Louis Vuitton, Givenchy, Tag Heuer, Fendi, Hennessy, Moet & Chandon, Bulgari, and Glenmorangie. 

The company earned €15.5 billion (US$17.6 billion) in revenue in the September quarter of 2021 compared to €11.96 billion (US$13.59 billion) for the same period in 2020. 

It has a market capitalization of US$415.20 billion. Its P/E ratio is 38.54. The dividend yield is 1.00%. The stock moved in the range of US$171.91 to US$118.48 in the last 52 weeks. The LVMUY stock closed at US$163.505 on January 6, 2022.

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Molson Coors Beverage Company (NYSE: TAP)

Golden, Colorado-based Molson Coors is the fifth-largest beer producer in the world. The company has popular brands, including Coors, Miller, Blue Moon, Vizzy, and Staropramen. The company uses a hybrid model for sales and marketing in Canada and Europe. In the US, it uses independent distributors.

For the quarter ended September 30, 2021, the net sales were US$2.8 billion compared to US$2.75 billion in the comparable period in 2020. Its net income was US$453 million or US$2.08 per share diluted compared to US$342.8 million or US$1.58 per share diluted in the September quarter of 2020.

Molson Coors has a market capitalization of US$10.9 billion. Its forward P/E ratio for one year is 11.85. The current dividend yield is 2.75%, and the annualized dividend is US$1.36.

The stock price in the last 52 weeks moved in the range of US$61.48 to US$42.46, and the stock closed at US$49.78 on January 6, 2022.

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Five alcohol stocks to watch when market gets choppy

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Diageo plc (NYSE: DEO) 

London-based Diageo Plc is one of the world's leading producers of premium spirits, including wine and beer. Some of its popular brands are Johnnie Walker blended scotch, Smirnoff vodka, Captain Morgan rum, Guinness stout, Baileys Irish Cream, and Crown Royal Canadian whiskey. 

The company also has a 34% stake in the premium champagne and cognac maker Moet Hennessy and a 55% stake in United Spirits.

It posted revenue of £5.8 billion (US$7.9 billion) for the quarter ended June 30, 2021, compared to £4.55 billion (US$6.18 billion) in the same period in 2020. The net income was £1.08 billion compared to £0.456 billion in the same quarter of 2020.

Diageo has a market capitalization of US$125.19 billion. Its P/E ratio is 35.01. The current dividend yield is 1.84%.

The stock price in the last 52 weeks moved in the range of US$223.13 to US$153.67 and the stock closed at US$215.06 on January 6, 2022.

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Bottomline

Alcohol demand rose in 2021 after a drop in the previous year due to the closing of restaurants and bars. Market observers expect a steady growth momentum for the industry in 2022. However, investors must apply due diligence before investing in stocks.  

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