My last blog post about beer, available here, got me thinking about other options for investing in companies that manufacture and/or distribute beer, wine, and liquor. Not surprisingly, most vineyards, breweries, and distilleries are privately owned. However, there are some options for investors to consider.
As with beer, wine and spirits are good for all occasions whether sad or joyous, so these companies can be good, solid, long-term investments. Globally, the demand for whiskey, in particular, has been on the rise with older markets in Europe and the Americas reinvigorated by the reintroductions of old favorites like rye whiskey, and new markets in Asia are increasing their demand for all spirits. The companies listed below are some of the biggest and best in the industry poised to meet global demand.
Headquartered in Louisville, Kentucky, Brown-Forman Corporation (NYSE:BF.B) has several brands under its umbrella, including Southern Comfort and Canadian Mist, as well as Finlandia Vodka, but, they are best known for their Jack Daniels line of whiskeys.
Recently, they’ve been heavily marketing Gentleman Jack, their foray into the premium whiskey market with their flagship brand. Brown-Forman Corporation (NYSE:BF.B) has its Woodford Reserve premium whiskeys, but they are hoping to really expand their reach into the premium market with Gentleman Jack.
Brown-Forman Corporation (NYSE:BF.B) has a market cap of just over $15 billion and an P/E ratio of 26.21. While I would like the P/E to be a little lower, their earnings per share are $2.70 and they have a stable beta of 0.46. Since they also pay dividends, Brown-Forman Corporation (NYSE:BF.B) is a strong choice for anyone’s portfolio.
Based in Deerfield, Illinois, BEAM Inc (NYSE:BEAM) is a relatively new company with very old brands. BEAM Inc (NYSE:BEAM) was formed in 2011 when Fortune Brands’ holding company sold off its other product lines to focus on their beverage products.
BEAM Inc (NYSE:BEAM) owns many well known liquor brands, including Maker’s Mark, Knob Creek, Gilbey’s, Canadian Club, and, of course, Jim Beam. Despite a snafu earlier this year when Maker’s Mark announced it would be reducing its alcohol content to an outraged drinking public, BEAM Inc (NYSE:BEAM) still has a market cap of just under $10 billion and earnings per share of $2.38, as well as dividends.
With a P/E ratio of 25.91 and a beta of 1.01, BEAM Inc (NYSE:BEAM) could be better. I’d like it’s P/E to be a little lower, but BEAM Inc (NYSE:BEAM) is another good choice for a long-term investment portfolio. I probably wouldn’t be so sure of that if they hadn’t reversed their decision on Maker’s Mark and stuck with the original (perfect) formula.