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  • Jamie O'Donoghue

Pitcher Perfect: 3 Tempting Beer Stocks

Add some fizz to your investing portfolio with these three beer companies.

Photo by Giovanna Gomes on Unsplash

Few things say ‘summertime’ more than a nice cold bottle of suds. And while Americans don’t drink quite as much beer as their European cousins, the drink remains a national favorite. An alcohol-consumption survey conducted last year found that almost a third of U.S. adults considered beer to be their booze of choice.

While drinking habits in the U.S. and farther afield are not what they used to be, it’s fair to say that the market for lager, ale, porter, and stout will always be worth paying attention to.

Here are three international beer stocks that are brewing promising returns:

1. Diageo

Diageo (NYSE: DEO), the British alcoholic beverage giant, is one of beer-obsessed Europe’s most beloved companies. Many of its products — Scottish-made Johnnie Walker, Russian-made Smirnoff, and most of all, Ireland’s Guinness — have acquired the status of unofficial national icons in their respective countries.

As well as dominating the beer industry, Diageo is the world’s largest spirits company. Every year, it produces more than 240 million units from its portfolio of brands across a global network of 150 manufacturing sites.

One of Diageo’s chief strengths is its exceptional marketing capabilities. The company’s television commercials for Guinness are legendary in Great Britain and Ireland, while its whiskey segment recently saw a sales boost following a partnership between scotch brand Johnnie Walker and HBO’s 'Game of Thrones.'

This is one company that won’t likely be accused of trailing behind the times.

2. The Boston Beer Company

The Boston Beer Company (NYSE: SAM) is the brewer behind the all-American beer Samuel Adams. Although rivals Budweiser and Coors remain the top-selling beer brands in the U.S., there’s nothing quite so uniquely American as Samuel Adams, the flagship brand of The Boston Beer Company.

However, Samuel Adams is just the tip of the proverbial iceberg. Boston Beer produces more than 60 different beers, including a series of wildly popular seasonal brews. Last year, it even crossed into new territory with the release of Angry Orchard, a ‘hard cider.’

A couple of months ago, the company acquired Dogfish Head Brewery for $300 million, helping to make Boston Beer the second largest craft brewer in the US.

A public company since 1995, Boston Beer boasts a loyal base of customers, drawn towards an attractive company culture (it shares hops with smaller breweries during shortages, for example) as well as some of the best beers on the market.

3. Constellation Brands

Last year, New York-based Constellation Brands (NYSE:STZ) made headlines in the investing world when it purchased a 38% stake in Canadian marijuana producer Canopy Growth. While the future of marijuana is far from certain, Constellation remains a great stock solely for its extraordinarily strong brand portfolio.

The third-largest beer company in the United States, Constellation owns the exclusive rights to not one but two of the country’s most popular beer brands: Corona and Modelo.

While other major American beers have struggled to keep up with a rapidly changing market, these two classics have actually seen impressive growth in recent years. In fact, Constellation reported sales growth of 7% in June’s earnings report, for which it credited the continued success of these two fixtures. Meanwhile, the company’s craft beer business, which includes Ballast Point, is very much on the rise.

In other words, Constellation proves that while latching on to a hot new trend like marijuana can often be good for business, it doesn’t compare to producing a well-loved product that has stood the test of time.

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Diageo, Constellation Brands, and The Boston Beer Company. Read our full disclosure policy here.

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