5 Best Liquor Stocks to Buy Now

In this article, we will look at the 5 best liquor stocks to buy now. If you want to read our discussion on the trends in the alcoholic beverage industry and its future outlook, you can go directly to 12 Best Liquor Stocks to Buy Now.

5. Diageo plc (NYSE:DEO)

Number of Hedge Fund Holders: 21

Diageo plc (NYSE:DEO) is a London, England-based manufacturer of alcoholic beverages with 200 brands under its coverage and a presence in over 180 countries.

For the year ended June 30, 2022, Diageo plc (NYSE:DEO) observed a 21.4% annual increase in net sales to $18.78 billion. Meanwhile, the net income grew by 18.2% to $5.34 billion. The maker of Johnnie Walker saw a decline of 9% in net sales during the peak of the pandemic in FY20. However, the company bounced back in FY21 and reported an increase in net sales of over 8%. Diageo plc (NYSE:DEO) is a beneficiary of the premiumization movement as consumers are moving towards brands with higher price points. This was evident by the fact that the super-premium segment experienced an increase of over 31% YoY during FY22.

Here’s what ClearBridge Investments said about Diageo plc (NYSE:DEO) in its Q2 2022 investor letter:

“Diageo is a leading global distiller and brewer which addresses the large ($500 billion-plus) and fragmented market for spirits. With its portfolio of premium products, we see Diageo as a steady compounder poised for sustained, above industry growth. The company’s margins remain below pre-COVID levels in a number of geographies and should continue to recover as channels reopen, though we also see opportunities for consistent margin expansion beyond this period of rebound. The spirits category is not immune to weaker consumer spending nor inflation; however the majority of Diageo’s profits are from the U.S. market, which has historically been more resilient. Additionally, the company has a number of margin levers to help combat rising input costs.”