In this article, we discuss the 11 best liquor stocks to buy now.
As every other industry that was impacted by the COVID-19 pandemic, the liquor market was hit hard as well. It was reported by drinks market analysis platform IWSR that global alcoholic beverage consumption dropped by 6.2% in 2020, owing to the local bars, clubs, and restaurants shutting down during nationwide lockdowns. The global supply chain disruption impacted the alcohol industry as well, with aluminum and glass shortages causing hindrances in packaging beverages, and raw material shortages were an inherent issue as well.
However, as economies are slowly moving back to normal momentum, lockdowns are being lifted, and the demand for alcohol is steadily increasing. The alcohol industry is expected to grow globally by 3% in 2021, due to the resilience of core markets and the rapid response of beverage companies to the dynamic market conditions.
A few trends that became the norm in 2020 are here to stay, according to market analysts and researchers. The COVID-19 pandemic promoted e-commerce, and buyers suddenly shifted towards online retailers for purchasing alcohol during lockdowns. Secondly, whiskey is becoming an increasingly popular beverage among the core markets including the US and India, and whiskey revenue is expected to reach over $20 million by 2023.
Pixabay/Public Domain
Another lasting trend in the liquor industry is the premiumisation of alcoholic beverages, with consumers willing to spend extra money on luxury blends, finely aged liquor, and exclusive brands. While high-end spirits remain a popular choice among liquor aficionados, demand for ready-to-drink alcoholic beverages and hard seltzers is also soaring, with sales growing by 597% and 193% as compared to last year, respectively.
The best liquor stocks according to hedge funds and market popularity as of Q3 2021 are Constellation Brands, Inc. (NYSE:STZ), Brown-Forman Corporation (NYSE:BF-B), Molson Coors Beverage Company (NYSE:TAP), and Diageo plc (NYSE:DEO), among others discussed in detail below.
Our Methodology
To create a list of the 11 best liquor stocks, we selected beverage companies that were popular among hedge funds, had positive analyst ratings, and long-term growth potential.
Best Liquor Stocks to Buy Right Now
11. Pernod Ricard SA (OTC:PDRDF)
Number of Hedge Fund Holders: N/A
Pernod Ricard SA (OTC:PDRDF) is the second largest wine and spirits retailer in the world, and the French beverage company is known for its signature anise-flavored drinks called pastis. With more than 240 distinct and premium brands, Pernod Ricard SA (OTC:PDRDF)’s beverages are sold in over 160 countries. Some signature brands include Jameson, Avion, Ricard, Malibu, and Pernod, among others.
Pernod Ricard SA (OTC:PDRDF) reported sales for the third quarter as $2.34 billion, and announced organic growth of 19% in the first nine months of 2021. The Q3 sales exceeded analysts’ estimated revenue of $2.21 billion by $0.13 billion.
JPMorgan analyst Celine Pannuti on November 30 raised the price target on Pernod Ricard SA (OTC:PDRDF) to €250 from €225 and kept an Overweight rating on the shares.
It was reported on September 21 that Pernod Ricard SA (OTC:PDRDF) has acquired The Whiskey Exchange, a leading online retailer of beverages and fine spirits, which would allow Pernod Ricard SA (OTC:PDRDF) to leverage the synergies and access a broader clientele via The Whiskey Exchange’s healthy online global presence.
In addition to Constellation Brands, Inc. (NYSE:STZ), Brown-Forman Corporation (NYSE:BF-B), Molson Coors Beverage Company (NYSE:TAP), and Diageo plc (NYSE:DEO), Pernod Ricard SA (OTC:PDRDF) is one of the best liquor stocks to buy now.
10. Rémy Cointreau SA (OTC:REMYY)
Number of Hedge Fund Holders: N/A
Rémy Cointreau SA (OTC:REMYY) is a French, family-owned beverage company with a diverse brand portfolio including cognacs, liquors, and spirits. Rémy Martin, Louis XIII cognacs, and Cointreau liqueur are some of the most well-known offerings of Rémy Cointreau SA (OTC:REMYY). To further expand its operations, Rémy Cointreau SA (OTC:REMYY) acquired two alcoholic beverage companies in 2020, namely Maison de Cognac J.R. Brillet and the century-old Champagne House J. de Telmont.
Rémy Cointreau SA (OTC:REMYY), on November 25, posted its financial performance for the first half of 2021-2022. The revenue jumped 52% on an organic basis, coming in at €645.3 million. Rémy Cointreau SA (OTC:REMYY) reported strong demand momentum in China and the United States, and a solid recovery in the European market. EPS for the period totaled €2.95, gaining 126% as compared to the €1.31 EPS in the first half of 2020-2021. The strong financials, despite the COVID-19 challenges, makes Rémy Cointreau SA (OTC:REMYY) one of the best liquor stocks to buy now.
On November 15, Barclays analyst Laurence Whyatt upgraded Rémy Cointreau SA (OTC:REMYY) to Overweight from Equal Weight with a price target of €234, up from €175. The analyst believes that the stock has a good growth potential, and continuously surprises with its upside. The analyst thinks the cognac division can deliver 10% medium-term growth, ahead of Rémy Cointreau SA (OTC:REMYY)’s indicated 8%.
9. Corby Spirit and Wine Limited (OTC:CBYDF)
Number of Hedge Fund Holders: N/A
Corby Spirit and Wine Limited (OTC:CBYDF) is a Canadian manufacturer and distributor of alcoholic beverages, and is partly owned by Pernod Ricard SA (OTC:PDRDF) since September 2020. Corby Spirit and Wine Limited (OTC:CBYDF) holds the 25 top selling Canadian spirits brands under its domain, and the company is expanding its horizons to the US, Europe, and Australia. Some of Corby Spirit and Wine Limited (OTC:CBYDF)’s popular beverages include J.P. Wiser’s Whisky, Lamb’s Rum, Polar Ice Vodka, and McGuinness Liqueurs.
Corby Spirit and Wine Limited (OTC:CBYDF), on November 10, announced a quarterly dividend of CAD 0.24 per share, which represents a 14.3% jump from the prior-quarter per share dividend of CAD 0.21.
It was reported by the company management that Corby Spirit and Wine Limited (OTC:CBYDF) experienced strong demand and is on a solid recovery track after the COVID-19 pressures, and its financial quarterly results for the period ended September 30 2021 are not indicative of the entire year’s outlook.
As per the announcement on November 10, EPS for the quarter ended September 30 came in at CAD 0.25, down 35% year-over-year. Similarly, the reported quarterly revenue amounted to CAD 38.5 million, down 11% from the prior-year-quarter.
8. Compañía Cervecerías Unidas S.A. (NYSE:CCU)
Number of Hedge Fund Holders: 7
Founded in 1902, and headquartered in Santiago, Chile, Compañía Cervecerías Unidas S.A. (NYSE:CCU) is the largest brewer and the second largest wine producer in its region, making it one of the top liquor stocks to purchase now. The company is recognized for its alcoholic and non-alcoholic beverages, including cider, beer, spirits, and wine. In addition to producing its own brands, Compañía Cervecerías Unidas S.A. (NYSE:CCU) is also licensed to sell beverages from Anheuser-Busch InBev SA/NV (NYSE:BUD), Heineken N.V. (OTC:HEINY), Paulaner Brewery GmbH & Co., and Guinness Brewery, as well as non-alcoholic beverage brands including PepsiCo, Inc. (NASDAQ:PEP) and Keurig Dr Pepper Inc. (NASDAQ:KDP).
Compañía Cervecerías Unidas S.A. (NYSE:CCU), on November 3, posted its Q3 results. EPS in the quarter totaled $0.28, beating estimates by $0.02. The $766.05 million revenue also outperformed estimated revenue by $143.42 million.
Goldman Sachs analyst Thiago Bortoluci on October 18 upgraded Compañía Cervecerías Unidas S.A. (NYSE:CCU) to Neutral from Sell with a price target of $16.80, down from $17. The analyst stated that the short-term outlook for local consumption remains encouraging, although the stock price has been pressured by concerns regarding the macro environment, including the upcoming presidential elections, foreign exchange rates, and inflation.
According to Insider Monkey’s Q3 database, 7 hedge funds reported owning stakes in Compañía Cervecerías Unidas S.A. (NYSE:CCU), with the leading stakeholder of the company being Jean-Marie Eveillard’s First Eagle Investment Management, holding over 14 million shares worth $242.74 million as of September 2021.
7. Anheuser-Busch InBev SA/NV (NYSE:BUD)
Number of Hedge Fund Holders: 11
Anheuser-Busch InBev SA/NV (NYSE:BUD) is a Belgian multinational brewing company with almost 630 beer brands distributed across 150 countries. Amongst Anheuser-Busch InBev SA/NV (NYSE:BUD)’s global brands are Budweiser, Corona, and Stella Artois, and the company has an international and domestic brand portfolio that is extremely diversified.
Anheuser-Busch InBev SA/NV (NYSE:BUD) announced a Q3 EPS of $0.50 on October 28, missing estimates by -$0.05. The quarterly revenue amounted to $14.27 billion, gaining 11.38% year-over-year, outperforming estimated revenue by $630.67 million.
JPMorgan analyst Celine Pannuti on November 30 raised the price target on Anheuser-Busch InBev SA/NV (NYSE:BUD) to €55 from €46 and kept an Underweight rating on the shares.
Of the 11 hedge funds that were bullish on Anheuser-Busch InBev SA/NV (NYSE:BUD) as per Insider Monkey’s Q3 database, Ken Fisher’s Fisher Asset Management holds a leading stake in the company, with over 8.1 million shares valued at $462.1 million.
6. MGP Ingredients, Inc. (NASDAQ:MGPI)
Number of Hedge Fund Holders: 13
MGP Ingredients, Inc. (NASDAQ:MGPI) is an American beverage company operating out of Kansas and Indiana, focused on creating fine whiskeys, ryes, bourbons, gins, and vodkas. Since 2015, MGP Ingredients, Inc. (NASDAQ:MGPI) has been working on creating a premium beverage portfolio, and in 2021, the company acquired and merged with Luxco, Inc., which is a renowned producer of branded beverage alcohol products.
MGP Ingredients, Inc. (NASDAQ:MGPI) is one of the best liquor stocks to buy now, reporting solid Q3 earnings on November 3. EPS in the period equaled $1.09, beating estimates by $0.69. Revenue for the quarter exceeded estimates by $28.66 million at $176.61 million.
As of Q3 2021, 13 hedge funds tracked by Insider Monkey were bullish on MGP Ingredients, Inc. (NASDAQ:MGPI), with total stakes amounting to $32.1 million. This is compared to 14 funds holding stakes worth $45.4 million in the company in the preceding quarter.
On November 29, Truist analyst Bill Chappell upgraded MGP Ingredients, Inc. (NASDAQ:MGPI) to Buy from Hold with a price target of $100, up from $80. The analyst stated that the company’s year-to-date performance was strong, and that MGP Ingredients, Inc. (NASDAQ:MGPI) should post solid and consistent performance for the foreseeable future. Demand for whiskey in the US also remains solid.
Arrowstreet Capital is the leading MGP Ingredients, Inc. (NASDAQ:MGPI) stakeholder as of September this year, holding 134,996 shares worth $8.78 million.
In addition to Constellation Brands, Inc. (NYSE:STZ), Brown-Forman Corporation (NYSE:BF-B), Molson Coors Beverage Company (NYSE:TAP), and Diageo plc (NYSE:DEO), MGP Ingredients, Inc. (NASDAQ:MGPI) is one of the best liquor stocks to buy now.
5. Ambev S.A. (NYSE:ABEV)
Number of Hedge Fund Holders: 15
Ambev S.A. (NYSE:ABEV) is a Brazilian brewing company, and is one of the largest companies by market capitalization in the region. Founded in 1999, Ambev S.A. (NYSE:ABEV) was merged into Anheuser-Busch InBev SA/NV (NYSE:BUD) in 2008.
On October 28, the Q3 EPS for Ambev S.A. (NYSE:ABEV) came in at $0.04, beating estimates by $0.01. The $3.29 billion quarterly revenue also exceeded estimates by $263.5 million.
BofA analyst Isabella Simonato upgraded Ambev S.A. (NYSE:ABEV) to Neutral from Underperform with a price target of $3.50, up from $3.00 on November 3. The analyst stated that Ambev S.A. (NYSE:ABEV)’s “significant” volume beat in Q3 was testament to the success of its commercial beer strategy in Brazil, and the momentum may continue for at least the next two quarters. However, the stock is currently trading above historical valuation.
One of the leading Ambev S.A. (NYSE:ABEV) shareholders as of Q3 2021 is Pzena Investment Management, with 7.58 million shares amounting to almost $21 million. Overall, 15 hedge funds were bullish on Ambev S.A. (NYSE:ABEV) at the end of September, down from 18 funds in the preceding quarter.
Here is what Harding Loevner has to say about Ambev S.A. (NYSE:ABEV) in its Q2 2021 investor letter:
“By sector, good stocks in Information Technology (IT) and Consumer Staples were large positive contributors, offset by weaker results in Financials and Consumer Discretionary. In Consumer Staples, Brazil’s premier beer company Ambev posted impressive results helped by strong sales of premium brands and robust demand in its home market, which reduced the need for discounts.”
4. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders: 18
Diageo plc (NYSE:DEO) is a multinational beverage corporation, with operations and production facilities in more than 140 countries, and distribution across 180 countries. In addition to being one of the major players in the spirits market, Diageo plc (NYSE:DEO) is also the world’s largest producer of scotch whiskey.
Diageo plc (NYSE:DEO) posted its financial performance for FY2021. Revenue for the period totaled £12.73 million, up 8.3% year-over-year, comparable to the 2020 revenue of £11.75 million. Diageo plc (NYSE:DEO)’s earnings per share for 2021 equaled £1.13, increasing 89.4% as compared to the prior year EPS of £0.60.
On November 30, JPMorgan analyst Celine Pannuti raised the price target on Diageo plc (NYSE:DEO) to £4,350 from £3,800 and kept a Neutral rating on the shares.
Of the 18 hedge funds that were bullish on the company as per Insider Monkey’s Q3 database of elite funds, Nicolai Tangen’s Ako Capital is the leading Diageo plc (NYSE:DEO) stakeholder, holding 1.43 million shares worth $276.35 million.
Here is what Weitz Investment Management has to say about Diageo plc (NYSE:DEO) in its Q1 2021 investor letter:
“We sold Diageo after twelve years of very profitable ownership. The global spirits company has done a fine job of growing earnings, and the stock has enjoyed an extra boost from substantial, multiple expansions along the way. While the business is in good hands, we think a repeat of our mid-double-digit annualized return experience is far less likely. We simply see better risk/reward profiles in the Fund’s other quality holdings.”
3. Molson Coors Beverage Company (NYSE:TAP)
Number of Hedge Fund Holders: 29
Molson Coors Beverage Company (NYSE:TAP) is an American-Canadian brewing company that was created after Molson from Canada and Coors from the US merged in 2005. After acquiring Miller Brewing Company in 2016, Molson Coors Beverage Company (NYSE:TAP) became one of the largest alcoholic beverage companies. The product portfolio at Molson Coors Beverage Company (NYSE:TAP) includes Blue Moon, Coors Light, Miller Lite, and Milwaukee’s Best, among other beers, spirits, and wines.
Molson Coors Beverage Company (NYSE:TAP), on October 28, announced Q3 earnings. EPS in the quarter totaled $1.75, outperforming estimates by $0.24. The $2.82 billion revenue gained 2.51% year-over-year, but missed estimated revenue by -$91.44 million.
On October 18, Deutsche Bank analyst Steve Powers lowered the firm’s price target on Molson Coors Beverage Company (NYSE:TAP), to $48 from $50 and kept a Hold rating on the shares, citing supply chain bottlenecks and subdued demand due to COVID-19 pressures.
Out of the 867 hedge funds tracked by Insider Monkey as of Q3 2021, Ariel Investments is the leading Molson Coors Beverage Company (NYSE:TAP) stakeholder, holding a $35.6 million position in the company. Overall, 29 funds were bullish on Molson Coors Beverage Company (NYSE:TAP) at the end of September, down from 39 funds in the preceding quarter.
Here is what Argosy Investors has to say about Molson Coors Beverage Company (NYSE:TAP) in its Q2 2021 investor letter:
“TAP (+52% from August 2020 purchase to sale) was never intended to be a core position. I expected a couple of years of deleveraging and perhaps some excitement around the hard seltzer category, but the stock price increased faster than I expected. I have not fully exited these positions as I rarely do all in one trade, but hopefully this gives some perspective into my thinking on selling so quickly.”
2. Brown-Forman Corporation (NYSE:BF-B)
Number of Hedge Fund Holders: 31
Making it to our list of the best liquor stocks is one of the largest American manufacturers of spirits and wine, namely Brown-Forman Corporation (NYSE:BF-B). It is a Kentucky-based beverage company offering a wide range of liquor brands including Jack Daniel’s, Early Times, Old Forester, Woodford Reserve, and Chambord, among others.
On November 18, it was announced that Brown-Forman Corporation (NYSE:BF-B) increased its quarterly cash dividend on its Class A and Class B common stock by 5% to $0.1885 per share from the prior quarter’s $0.1795. The quarterly dividend will be paid on December 28 to shareholders on record as of December 3. In addition to that, $480 million will also be paid out on December 29 as a special one-time dividend to stakeholders of record on December 9.
Brown-Forman Corporation (NYSE:BF-B)’s leading stakeholder as of Q3 2021 is Terry Smith’s Fundsmith LLP, with 14.42 million shares amounting to $966.45 million. Overall, 31 hedge funds were long Brown-Forman Corporation (NYSE:BF-B) as of September, with total stakes amounting to $1.65 billion.
1. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 53
Constellation Brands, Inc. (NYSE:STZ) is the top ranked liquor stock on our list, with 53 hedge funds in the elite database of Insider Monkey being bullish on Constellation Brands, Inc. (NYSE:STZ), with a total stake value of $1.71 billion as of September 2021. Harris Associates is the leading stakeholder of the company, with over 4 million shares worth almost $850 million.
Constellation Brands, Inc. (NYSE:STZ) is an American producer and distributor of beer, wine, and spirits, owning more than 100 beverage brands. From its portfolio of local and imported alcoholic beverages, the most well known brands include Robert Mondavi, Richards Wild Irish Rose, Ravenswood Winery, Corona, Modelo Especial, Funky Buddha, and High West Whiskey, among others.
Q2 earnings were announced by Constellation Brands, Inc. (NYSE:STZ) on October 6, with EPS for the quarter coming in at $2.38, missing estimates by -$0.38. The $2.37 billion revenue was up 4.9% from the prior-year quarter, outperforming estimates by $69.49 million.
Following the second quarter earnings results, HSBC analyst Carlos Laboy on October 13 upgraded Constellation Brands, Inc. (NYSE:STZ) to Buy from Hold with a price target of $262, up from $254. The analyst stated that demand for Constellation Brands, Inc. (NYSE:STZ) was strong, and the company had solid fundamentals.
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Disclosure: None. 11 Best Liquor Stocks to Buy Right Now is originally published on Insider Monkey.
