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.
Founded in 1945, Victor, New York-based Constellation Brands, Inc. (NYSE:STZ) is the largest wine producer in the world. Poised to get all the U.S. rights to Mexico’s Modelo beer brands, including Corona Extra and Corona Light, along with its acquisition of Crown Imports, Constellation Brands, Inc. (NYSE:STZ) will also be a tremendous player in the beer industry as America’s third largest brewer.
Constellation Brands, Inc. (NYSE:STZ) currently doesn’t have a large number of spirits under its umbrella, and the ones it does have, like Svedka Vodka and Black Velvet Canadian whiskey, aren’t as well known as the Beam or Brown-Forman brands.
With a market cap of over $8.5 billion, earnings per share of $2.11, and price to earnings ratio of 22.20, Constellation Brands, Inc. (NYSE:STZ) is definitely a company to watch. Unfortunately, they don’t pay dividends and their beta of 1.21 is less stable than Beam’s or Brown-Foreman’s.
Conclusion
BEAM Inc (NYSE:BEAM) and Brown-Forman pay dividends, which always makes me smile favorably on a company. However, Constellation Brands, Inc. (NYSE:STZ) has had a strong, mostly climbing stock chart for a decade, so the moral of the story (if there can be a moral in a story about alcohol) is that booze is good for the bottom line provided you’re investing in it more than you’re drinking it.
The article Drink Up: Investing in Wine and Spirits originally appeared on Fool.com and is written by Marie Flanigan.
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