3 Beer Stocks to Tap

These three brewing barons are high-quality businesses with entrenched positions in a consolidated market - and now they're about to catch some tailwinds of growth

Vikram Barhat 10 August, 2020 | 12:12AM

Beer Bottles

Temperatures and equity markets are ticking higher in tandem, which means it may be time for investors to cool down a little. And what better way to do that than grabbing a beer – or a beer stock? With current valuations significantly lower than their pre-pandemic highs, brewers represent sound allocation bests for opportunistic investors thirsty for value.

Alcoholic beverage stocks, including those of beer companies, fall into the consumer staples category, and are somewhat insulated against economic cycles - after all, beer is a low-cost treat that consumers continue to buy even at the worst of times. Indeed, despite the current weakness due to the coronavirus-related lockdowns, supply constraints, and travel restrictions, the beer industry enjoys relative immunity.

The global alcoholic beverage market, of which beer industry is the biggest constituent, is projected to grow more than tenfold, from $3 billion (£2.3 billion) in 2020 to $33 billion in 2027, or 3% annually.

We have looked at three high-quality businesses operate in a highly consolidated market, have entrenched positions, and benefit from the growth tailwind created by secular trends such as global increase in younger demographic:

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Anheuser-Busch InBev SA/NV ADR68.63 USD3.45
Constellation Brands Inc A207.65 USD3.01
Molson Coors Beverage Co B47.03 USD6.56

About Author

Vikram Barhat  is a Toronto-based financial writer specialising in investing, stock markets, personal finance and other areas of the financial services industry. 

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