Planning for the Future

Beverage stocks to own when this all ends.

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If you can stomach getting into the stock market this year, here are some tips. / Galina Peshkova ©123RF.com

For those with a mind for the stock market, Andy Kauth, a Denver-based investment advisor and wealth manager, reminds us that despite a disastrous 2020, adult beverage companies are performing quite well. He offers some thoughts on potential investments:

Illustration of three graph lines trending upwards with various bottles and glasses.

“As a whole, alcoholic beverage companies are a solid investment. If death and taxes are the only certainties, well, a glass of Scotch (or wine, or beer) sure makes that easier to swallow. Major alcohol beverage companies like Anheuser-Busch InBev (BUD), Diageo (DEO), Brown-Forman (BF.B), and Molson Coors (TAP) have strong brand portfolios, loyal customers, and high pricing power—not to mention global distribution networks and higher cash flow, all of which allow them to pay a higher dividend to stockholders. But what’s really set them up for success this year is how they’ve innovated (e.g., Constellation Brands (STZ) and Molson Coors made big moves toward cannabis beverages) and leaned into e-commerce sales. The market also welcomed some new players as Coca-Cola (KO) entered the hard seltzer market, which has proven itself to be more than a fad (prime example: Boston Beer Co. (SAM) now sells more hard seltzer than beer).”

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