Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Diageo plc (ADR) (DEO), Constellation Brands, Inc. (STZ): Raise Your Glass to These Wine Stocks

Page 1 of 2

Editor’s Note: This original article stated that Brown-Forman’s EPS was lower year-over-year. That is incorrect, this version has been modified. Motley Fool apologizes for the error.

Here in Silicon Valley, many a glass of Cabernet is raised to toast a business deal, a wedding, or simply the gathering of old friends.  Many Silicon Valley “veterans” retire up North to repeat their success in the growing wine industry, creating a whole new influx of money, talent, and ideas.

Diageo plc (ADR) (NYSE:DEO)

The wine craze shows no signs of stopping, but unfortunately there are only a few publicly traded wineries in North America to choose from.  Another way to invest in wine (and the safer way to go) is to choose the larger, more secure beverage companies that have significant holdings in major wineries, three of which are detailed below.

Constellation Brands

Although Constellation Brands, Inc. (NYSE:STZ) doesn’t represent a “pure” wine investment (it is a wine, beer, and spirits company), it does give the wine-savvy investor the opportunity to invest in Napa Valley wines. Constellation Brands, Inc. (NYSE:STZ)’s brand portfolio includes some Napa valley labels that are household names in SIlicon Valley – such as Robert Mondavi, Clos du Bois, Blackstone, Estancia, and Ravenswood.  This company appears to be a mixed bag in the eyes of investors as it has a CAPS rating of 3, and Fools and analysts alike either love it or hate it.  Given the huge brand portfolio, the popularity of its premium wine brands such as Ravenswood, Robert Mondavi, and Clos du Bois (my very favorite Merlot label), and great cash flow numbers (245.7M change in cash annually, announced at the last year end period, it has my vote. Those who hate it cite top-heavy management and slower growth rates than the valuation might indicate.  During the last earnings announcement, the CEO mentioned some higher grape costs creating margin pressure (margins are now around 50% total, quite respectable for a beverage company), but stated that his strategy will be to increase market share for the premium wine brands.  I’ll drink to that!


Beverage giant Diageo plc (ADR) (NYSE:DEO) is best known as the company behind Bailey’s; it is a little known secret that it also owns Beaulieu VIneyards and Sterling Vineyards through its UDV Guinness subsidiary. Both brands are premium and well-distributed to higher end grocery stores and restaurants, at least throughout the West.
Diageo plc (ADR) (NYSE:DEO) as a whole is highly diversified within the alcoholic beverage field, and owns such well known brands as Guinness, Smirnoffs, J&B, and Tanquerey.  A British company, Diageo is traded in 180 countries – with primary volume coming from the US New York Stock Exchange and the London Stock Exchange.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!